Monday 1 August 2011 

The effects of the Japanese earthquake and deteriorating freight rates in the container sector have continued to blight the performance of the country’s three biggest deepsea shipping lines, with NYK, MOL and K Line all posting fiscal first-quarter losses. 

NYK and MOL have also revised their projected 2011 profit substantially downwards.

NYK, the largest of the three in revenue terms, reported a net loss of ¥7.15 billion (US$92 million) in the three months ending on 30 June, compared with profits of ¥23 billion in 2010.

It revised its profit projection for the fiscal year ending in March 2012 to ¥5 billion from the ¥34 billion it had forecast in April.

The carrier blamed weak freight rates and delayed peak-season surcharges, “due mainly to the launch of large scale container vessels in the European route resulting in weakening demand-supply conditions and slowdown in the cargo traffic”.

MOL reported a net loss of ¥8 billion in the quarter, compared with a profit of ¥20.8 billion in the same period last year, with revenue plunging 12.1% to ¥349.1 billion.

The carrier said it anticipated a significant deterioration in profits, “due to factors such as declining demand in the containership segment, the current downturn of the dry bulk market and appreciation of the yen”.

The first-quarter results prompted the carrier to cut its full-year profit prediction by almost half, to ¥17 billion, from the ¥30 billion predicted in April.

Meanwhile, K Line posted a Q1 loss of ¥3.7 billion, compared with profits of ¥15.8 billion in 2010, and maintained its projection of a ¥2 billion year-end profit.

It said: “The car-carrier business is recovering due to rapid restoration of operations by Japanese automobile manufacturers after the earthquake in March.”

K Line also said that an increase in the value of the yen and deteriorating container rates had contributed to its negative first-quarter results.