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K Line books Q1 loss of $260.4m

K Line books Q1 loss of $260.4m
Japan’s Kawasaki Kisen Kaisha (K Line) has recorded a loss for its first quarter financial year ending 31 March 2017 due to sluggish business environment across the various shipping segments.

Net loss for the three months ended 30 June 2016 was registered at JPY26.79bn ($260.36m) as against the profit of JPY10.19bn in the same period of 2015.

First quarter revenue was down 27.1% year-on-year to JPY244.59bn.

For the full year ending 31 March 2017, the Japanese shipowner has forecast a loss of JPY45.5bn, widening from an earlier projection of a JPY35bn deficit.

K Line blamed the potentially bigger full year loss to uncertainty in economic and political conditions arising from geopolitical risks and Japanese yen appreciating against the US dollar.

K Line said that during its first quarter financial period, the container shipping business faced slumping freight rates mainly in the Asia-North America route, while the car carrier business has slowed down.

“From the second quarter of FY2016 onward, in containership business, there are signs that freight rate levels will recover for both Asia-North America and Asia-Europe services,” K Line commented.

“In the dry bulk business, although no significant icnrease in demand can be expected for marine cargo movement due to the slowing growth of the Chinese economy, there has been some progress toward the scrapping of vessels,” the company said.

For its LNG carrier and tanker businesses, K Line said it will work to secure stable revenues from medium and long term charters, while its offshore energy E&P support business and heavy lift segment are expected to experience pressure due to low oil prices.