Japanese lines steer different courses
The three Japanese shipping companies MOL, K Line and NYK ended their financial year 2012 in March. The results are very mixed.
MOL has posted a loss for the second year in succession. Whilst the shortfall in financial 2011 amounted to JPY 26 billion (USD 267 million), the negative result rose to a total of JPY 179 billion (USD 1.9 billion) in the last business year. According to statements from the company, the main reason for this development was a comprehensive restructuring programme that cost approximately USD 1 billion, combined with the generally poor market conditions.
The carrier reported total revenues of USD 16 billion in financial 2012. This equates to a 5.2% increase compared to the preceding year. This upswing was due in part to a recovery in the container sector vis-à-vis financial 2011. During that period, the loss from box transport was around the USD 307 million mark, whilst last year MOL was able to reduce its deficit to USD 115 million. The main reason for this was the increasing use of slow steaming and a reduction the number of sailings, according to MOL. In the current financial year, MOL expects to register a profit of USD 514 million from all of its business divisions.
K Line, in contrast, succeeded in inking black figures again last year, after reporting a loss in financial 2011. The net result for the entire group was JPY 10.7 billion (USD 113 million) in 2012, a favourable comparison to K Line’s loss of JPY 41 billion (USD 422 million) a year earlier. This change was the result of a stringent cost-cutting programme. K Line’s container transport business generated a profit of USD 68 million, a marked contrast to the loss of USD 396 million that was registered in 2011.
Like MOL, K Line also said that last year’s turnaround was primarily due to a series of efficiency-boosting measures, such as the deployment of larger vessels, the termination of several services, slow steaming and the attempts to raise freight rates, for example.
NYK benefits from diversification
In terms of the business figures, competitor NYK came out tops amongst Japan’s three major shipping companies. NYK registered a profit of JPY 18.8 billion (USD 193 million) for financial 2012, a very handsome result compared to the hefty loss of JPY 72.8 billion (USD 748 million) in 2011.
NYK has a wider range of vessels in its fleet than either MOL and K Line, and was able to benefit from profitable services in the bulk shipping sector and from the car transport business, which was also an earner.
The container-shipping field also proved to be less than pleasing from NYK’s financial point of view. However, the carrier succeeded in reducing its loss of JPY 44.7 billion (USD 455 million) in 2011 to JPY 9.4 billion (USD 96 million) in the year that closed in March 2013.