K Line slumps to $1bn annual loss on charter contract cancellations

Hit by losses from cancelled containership and bulk carrier charter contracts K Line reported a massive JPY111.1bn ($1bn) loss for FY18, end 31 March 2019.

The JPY111.1bn loss for FY18 compared to a profit of JPY10.38bn in the previous financial year. Revenues for FY18 fell to JPY836.7bn compared to JPY1.16trn in the year end 31 March 2018.

The JPY111.1bn loss was even higher than the JPY100bn forecast for FY18 forecast by K Line in early March 2019 when it revealed it would be hit by JPY50bn in losses from containership and bulker charter cancellations, plus a further JPY15bn in losses related to structural reform.

Read more: K Line hit with $448m in losses from charter contract cancellations

Despite the heavy losses over the last year K Line is expecting to return the black in the year ended 31 March 2020 with a forecast of a JPY11bn profit. In the coming financial year it is forecasting revenues of JPY760bn down 9.2% on the previous year.

K Line is expecting an improvement in dry bulk, mainly in the capesize segment and also aims to secure stable profitability through more long term contracts. Similarly it is looking to stablise profits in its energy transport business through mid-to-long term contracts, for VLCCs, LNG and LPG carriers.

Uncertainty is seen in the car carrier business due to issues such as threat of US import tariffs and the UK’s possible Brexit from the EU.

For its container line joint venture Ocean Network Express (ONE) with NYK and Mitsui OSK Lines it is expected to significantly improve earnings, liftings and utilisation.

Posted 26 April 2019

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Marcus Hand

Editor, Seatrade Maritime News

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