Japan’s Top Shipping Lines Trim Loss Estimates
TOKYO, Jan 31 (Reuters) – Japan’s top three shippers, Nippon Yusen KK (NYK), Mitsui OSK and Kawasaki Kisen Kaisha pared their full-year loss estimates on Tuesday as a downturn in the global container market stabilized and a weakening yen helped bolster earnings as they cut costs.
NYK, the biggest of the three by sales, lowered its forecast for an operating loss for the year to March 31 to 17 billion yen ($149.87 million) from an earlier 25.5 billion yen deficit prediction. That compares with a forecast for an average operating loss of 24.2 billion yen from 11 analysts polled by Thomson Reuters.
Mitsui OSK trimmed its loss estimate by 7 billion yen to an 8 billion yen loss prediction, while Kawasaki Kisen now sees a full year operating deficit of 43 billion yen compared with a 44 billion yen loss forecast three months ago.
“A market recovery in container and dry bulk and second quarter restructuring effects were the positives,” NYK said in its presentation material.
To survive what has been the biggest slump in container shipping since the industry’s creation in the 1950s and 1960s, NYK in October announced that it was integrating its container unit with those of Mitsui OSK and Kawasaki Kisen to create the world’s sixth-largest fleet.
The joint venture to be owned 38 percent by Nippon Yusen and 31 percent each by Mitsui OSK and Kawasaki Kisen, is slated to begin operations in April 2018 with some 256 ships, adding up to a total capacity of 1.38 million 20-foot equivalent units (TEU).
The three Japanese ocean freight firms operate a combined fleet of over 2,000 vessels, including tankers, dry-cargo carriers and container ships.
But in a sign of the continued concern over the fallout from that slump, Mitsui OSK on Tuesday cut its net income outlook to zero from 7 billion yen “due to concerns about the possibility for more impairment of owned containerships”.
The combined operating loss at the three shippers in the quarter to Dec. 31 totaled 1.4 billion yen compared with a profit of 6.3 billion yen a year earlier. ($1 = 113.4300 yen) (Reporting by Tim Kelly; Editing by Himani Sarkar and Muralikumar Anantharaman)
(c) Copyright Thomson Reuters 2017.
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