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K Line slumps to $468m loss in first nine months of FY2016

K Line slumps to $468m loss in first nine months of FY2016
The smallest of Japan’s K Line reported a JPY54.58bn ($468.5m) loss for the first nine months of the financial year ended 31 March 2017, but noted signs of recovery were “beginning to appear”.

K Line reported a JPY54.48bn loss for the nine-month period compared to a JPY9.27bn loss in the corresponding period a year earlier. Revenues sank to JPY760.93bn in the first nine months of the year ended 31 March 2017compared to JPY997.78bn in the same period a year earlier.

On segmental basis losses for container shipping for the period widened to JPY23.9bn compared to JPY4.2bn a year earlier. Bulk shipping, combining both dry and wet bulk, fell into the red with JPY5.6bn loss for the period compared to a JPY23.6bn in the same period in the previous year. Losses for the offshore energy, E&P support and heavy lift segment narrowed to JPY3.2bn for the period compared to a JPY6.5bn loss a year earlier.

Looking ahead K Line said the container shipping market appeared to have “bottomed out”, however short-term freight rate increases were expected to stall due to seasonal factors.

In dry bulk it noted while demand continued to increase adjusting the global tonnage surplus would take some time. In its LNG and tanker business K Line said it was working to secure stable revenues through medium-to-long term contracts.

Meanwhile expansion is on the cards in certain sectors and K Line said: “In the logistics business, short sea business and coastal business, the group will continue to aggressively expand its business operations.”

Overall the Japanese shipowner is started to see some basis for recovery of shipping markets. “Although signs of recovery in the overall marine transportation market conditions are finally beginning to appear, it is going to take some time before the balance between vessel supply and demand improves fundamentally. In these conditions, the Group will strive to improve profitability through efficient vessel allocation and further cost cutting while implementing structural reforms as planned," it said.