Top Japanese shipping lines optimistic despite falling profits

Tokyo: Japanese shipping giants Nippon Yusen K.K. (NYK), Mitsui O.S.K. Lines (MOL) and Kawasaki Kisen Kaisha ("K" Line) have raised their forecasts for full-year despite decreased profits for the first half of this year. All three companies highlighted higher fuel prices as the key reason for the fall in profits, a situation they believe will undergo a change next year.

NYK, which posted a 39% decrease in net profits to $250m for the half year ending September 30th (FHFY 2006), is of the opinion that profits will see an 15% increase to 68bn yen (US $577) for the year ending March 2007, citing a predicted fall in fuel prices and strengthening dry bulk demand as reasons for the upward revision to net profits. This analysis may be justified in light of the fact that despite falling profits, freight volumes actually rose for NYK's liner, bulkship and specialised carrier operations during FHFY 2006

MOL and "K" Line, which also posted decreased half yearly profits of 47.73bn yen (US $403.7m) and 20.6bn yen (US $ 174m) respectively, have predicted a similar strengthening of the market and released estimated net profits of 112bn yen (US $1bn) and 51bn yen (US $431m) for the financial year 2006.

Although all three shipping lines are looking to the strengthening dry bulk market to close the gap in profits, other areas, particularly car carriers and the energy sectors, are also expected to see steady growth. [13/11/06]

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