Japanese shipping firm K-Line reports today the company has dug themselves out of a loss-making situation over the past quarter in their containership business unit due to a combination of a greater number of containers shipped, the streamlining of unprofitable service lines and slightly higher rates on their Asia-Europe service.
Their company as a whole however saw slightly higher revenues, yet significantly lower net profit numbers. Profit decreased from ¥6.976 billion to ¥4.280 billion.
Even with China’s increased iron ore import shipments, K-Line’s reduced profit numbers are mostly attributed to their dry bulk division. The company notes their Capesize ships saw “lackluster” performance due to the continued situation of oversupply in the market. Their smaller Handysize and Panamax ships earned lower freight rates due to an imbalanced supply-demand situation from a reduced amount of sea-borne coal, easing of congestion at grain exporting ports in South America, the ore export ban from Indonesia and the adding of additional tonnage to the market. Segment income dropped from ¥12.2 billion to ¥6.4 billion.
“We expect market recovery in and after summer in the Capesize sector while slower recovery in Panamax and Handysize markets for it will take some more time to ease tonnage oversupply,” K-Line notes.
With most of the company’s fleet of LNG, LPG and large crude tankers on long or medium-term charters, K-Line reports things “operated steadily,” however due to a foreign exchange valuation loss, the financial performance of that sector saw decreased income and revenues. K-Line’s offshore support and heavy lifter business saw the same foreign exchange valuation issue as well, which combined with a “sluggish” spot charter market, resulted in decreased revenues and income on a QoQ basis and remained in the red.