Nippon Yusen Kaisha (NYK), Mitsui OSK Lines (MOL) and Kawasaki Kisen Kaisha (K Line), may add about JPY51.6bn ($525m) to their pretax profit this financial year as a weaker yen raises the value of contracts, according to Ryota Himeno, analyst at Barclays Securities Japan. The forecast assumes a JPY95 average to the US dollar.
The yen has dropped about 11% this year, helping to lift repatriated earnings from dollar-based contracts.
“The currency will be the biggest impact on profits this year,” Himeno said. “There aren't really any other drivers for profit: the shipping market isn't likely to get much better this year.”
NYK had said in January that every JPY1 decline against the dollar would raise profit by JPY1.1bn in the year ended 31 March 2013. MOL said a similar drop in the second half of the year would lift profit by JPY900m while K Lines said the drop would hike profit by JPY500m.
NYK may post a net profit of JPY29bn this fiscal year, according to projections by Bloomberg. K Line may also increase its profit while MOL may return to annual profit.
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