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K Line sinks to $1.24bn full year loss on restructuring, impairments

K Line sinks to $1.24bn full year loss on restructuring, impairments
Kawasaki Kisen Kaisha (K Line) reported a hefty loss of JPY139bn ($1.24bn) for FY2016 ended 31 March 2017 hit by restructuring losses and impairments.

The loss for the smallest of the Japanese big three shipowners in FY2016 compared to a loss of JPY51.5bn in FY2015, and the company reported revenues of JPY1.03trn for FY2016 down from JPY1.24trn in the previous year.

K Line said the loss was due to provisions of losses for restructuring and loss on impairments on fixed assets.

While hit by extraordinary losses all three main business sectors – container shipping, bulk shipping and offshore energy, E&P support, and heavy lifter – were in the red at an operating level. Container shipping reported a JPY31.5bn loss of FY2016, while bulk shipping racked up JPY9.5bn loss and offshore energy, E&P support and heavy lifter, lost JPY5.1bn.

Looking ahead K Line forecast a return to the black for FY2017 ended 31 March 2018 with a JPY21bn profit, with revenues of JPY1.13trn.

However, while forecasting a return to profitability, K Line also said the market would remain unstable. “In the business environment for shipping in 2017, the global economy will likely continue its gradual expansion, however there remains concern of sluggish demand for cargo movement due to uncertainty in both politics and economics such as geographical risks and protectionism.

“In addition, with the currently ongoing vessel supply pressure, it is expected that the market, which began a slight recovery, will remain unstable for a while.”