The $2.39bn loss for the year ended 31 March 2016 was a reversal of fortune compared to the profit of JPY18.24bn in the previous financial year.
NYK Line reported that the extraordinary losses comprised of an impairment loss and provision for losses related to contracts associated with containerships, dry bulkers and cargo aircraft.
The extraordinary losses also included an amount of JPY14.4bn for ‘anti-monopoly related allowance’ in connection with an investigation by the European Commission alleging the group of anticompetitive conduct in connection with its car carrier service since September 2012.
Full year revenue for the NYK Line came up to JPY1.92trn, down 15.4% compared to the previous financial year revenue of JPY2.27trn.
“Freight rates remained low in the container shipping market due to excess capacity, while the dry bulk shipping market did not substantially improve, even though the gap between supply and demand narrowed due to progress in scrapping vessels along with an increase in shipping traffic,” NYK Line commented.
The group’s liner trade turned in a full year loss of JPY12.7bn and bulk shipping took a loss of JPY4.1bn, while logistics reaped a profit of JPY7.6bn.
Looking ahead to the fiscal year ending 31 March 2018, NYK Line expects market conditions to continue recovering moderately, and projects a profit of JPY5bn.
NYK Line said it “expects to improve its bottomline owing to freight rates in annual contracts and greater cargo volume under a new alliance.”
NYK Line is presently a member of THE Alliance and from 2018 its container shipping business will merge with that of compatriots K Line and MOL.
NYK Line further commented that the dry bulk shipping market is projected to “pick up gradually, however, the tanker shipping market is expected to remain sluggish overall, and the number of vehicles shipped in the automobile transport market is forecast to remain on par with that of the fiscal year under review.”
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