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

K Line is taking a JPY50bn ($448m) hit on the cancellation of charter contracts for bulkers and containerships.

The losses from charter contract cancellations were revealed as the Japanese shipowner forecast it would loss JPY100bn for the year end 31 March 2019, up from a previous forecast of JPY20bn.

K Line said it was cancelling charter contracts for some of uneconomical containerships and small and medium sized dry bulkers to reduce the exposure to risks from market fluctuation. “K Line estimates about JPY50bn yen as extraordinary losses with respect to these chartering cancellations,” the company said.

The shipowner said would it was also taking a JPY15bn provision for losses related to structural reforms of its business.

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“K Line has revised the forecast of consolidated financial results ending March 2019 because of provision for losses regarding chartering in operating loss, reflection of impact by dry bulker’s weaken market conditions, extraordinary losses related to cancellation of chartering contracts, as well as the change of the timing implementation for extraordinary profit by assets’ sale such as fleets to subsequent period, which results in expansion of net loss attributable to owners of parent,” the company said.

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