RESTRUCTURING PAYS OFF AT MITSUI O.S.K. LINES
Kunio Suzuki, the new president of the Mitsui O.S.K. Lines group, said he expects last year’s record profit results to be continued in future years.
Mitsui O.S.K. Lines is forecasting a non-consolidated ordinary profit of 43 billion yen ($406 million) for the current fiscal year, due to end next March. This would be nearly 50 percent higher than the already high Yen 29 billion ($270 million) ordinary profit reported for the 1999-2000 fiscal year, said Suzuki, who was appointed president of Mitsui O.S.K. Lines in June.
“Last year was the best year for profitability in our history,” Suzuki said at a meeting in London.
In the first six months of the current fiscal year, covering the period April 1 to Sept. 30, Mitsui O.S.K. Lines had a non-consolidated ordinary profit of about Yen 25 billion ($230 million), up from Yen 12 billion in the corresponding period in 1999.
Suzuki stressed that the improvement in the company’s results came not only from higher vessel utilization and freight rates in the container shipping, tanker shipping and other sectors, but also from the restructuring of the group.
In container shipping, a sector where Mitsui O.S.K. Lines made a profit in the last fiscal year for the first time in 20 years, the group has closed the cost competitiveness gap between itself and its international competitors, the company said. “Previously, our costs were too high,” Suzuki said.
The company’s restructuring included the transfer of the management of the group’s container business from Tokyo to regional head offices in San Francisco, London and Hong Kong, and cost savings obtained through Mitsui O.S.K. Lines’ membership of the New World Alliance.
In June, the Japanese group also reduced its board of directors from 28 to 12 members. It appointed its first two external directors to work alongside 10 executive directors, and allowed certain decisions to be made without involving the board.