MOL says fuel costs will trim earnings
Mitsui O.S.K. Line, after a four-year period in which net income increased about 10-fold to about $968 million, is forecasting a 10 percent decrease in operating income and 8 percent decrease in net income for its fiscal year ending March 2007.
In its letter to shareholders, in the MOL annual report released Wednesday, chairman Kunio Suzuki and president Akimitsu Ashida said, “we are projecting small declines in earnings in bulk ships and a significant downturn in containership earnings, despite the outlook for growth in containership cargo volume. Higher fuel expense will be the primary drag on earnings.”
While container shipping is volatile, “MOL remains committed to this business,” they told shareholders. “Growing economies, especially in Asia, and rising global trade indicated that container shipping volumes will continue to climb by more than 10 percent annually.”
MOL plans to add 47 vessels in the current fiscal year so that it will have 750 by March 2007 and expects to increase that number to 900 by March 2010.
MOL's fleet has a total capacity of about 45 million deadweight tons. About 4 million dwt are containerships and other liner carriers, 24 million dwt are dry bulkers, 19 million dwt are tankers, and 2 million dwt are LNG carriers.