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Japanese shipping powerhouses brace for falling fortunes

Japanese shipping powerhouses brace for falling fortunes

Tokyo: Leading Japanese shipping lines Nippon Yusen Kaisha, Mitsui OSK Lines and Kawasaki Kisen Kaisha are still reeling from the effects of the recession, with NYK and K Line forecast full-year losses. MOL has also revised its outlook now anticipating significant deterioration of profits in the first six months of 2009. However, its overall forcast still sees it turning a profit for the year.

The falling fortunes of the three power houses come as the recession in the U.S. and Europe slashed demand for transporting goods by container while bulk rates remained depressed. MOL has cited 'deterioration of freight rates, stagnation of cargo trade mainly for containerships, and a delay in the recovery of completed car exports, along with a substantial rise in bunker prices' as reasons behind its revised forecast. It now expects to declare a consolidated operating income of 50bn Yen ($525m) on revenues of 1350bn Yen

Nippon Yusen expects a loss of 5bn yen ($53m) compared with an earlier forecast of net income 18 billion yen, it said in a statement today. K-Line, as Kawasaki Kisen is also known, forecast a loss of 31 billion yen compared with an earlier forecast of a profit of 6.5 billion yen.

The recession has choked demand for furniture, building materials and consumer electronics in the U.S. and Europe, driving down shipping rates. Nippon Yusen has slashed its fleet expansion by 15 percent and laid up container ships this year to stem declines in shipping rates as demand slumps. [27/07/09]