Tokyo: Escalating bunker prices and reduced containership profits were among factors cited for the lower-than-expected results from two of Japan's big three shipowners for the Q1 FY 2006, which has led them to revise downwards full-year profit forecasts.
Mitsui OSK Lines (MOL) reported a 27% fall in net profit to Y22.64bn for the quarter ended June 30, compared to Y31.1bn in the corresponding FY 2005 period. As a result the full-year forecast has been lowered from Y105bn to Y100bn.
'K" Line reported a 37% fall in Q1 net to Y9.7bn and cut its FY2006 net profit projection from Y45bn to Y42bn.
MOL blamed a 'skyrocketing' bunker price ( $100/metric tonne year-on-year) and declining profits of its containership business caused by both lower freights and higher costs. Higher bunkers had an Y7.5bn y-o-y negative impact on the quarter's results, it said, meaning profits were down despite a 20% increase in earnings for the quarter.
"K" Line president and ceo Hiroyuki Maekawa added that containerships earnings were below forecast because despite a 'bottoming out' of freight rates on Asia-Europe, loading volume on the trade was 'slightly' down on expectations. However, he predicted group results would improve through increased container cargoes in the peak season and the fact 'market levels for the tanker and dry bulk cargoes have been picking up sharply'. [03/08/06]
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