MOL’s profits up 77%, sets higher financial targets
The following corrects and expands on a report in Thursday’s Shippers’ Newswire, which used an incorrect U.S. dollar/Yen exchange rate.
Mitsui O.S.K. Lines’ net income jumped 77 percent to Yen98.2 billion ($916 million) in the fiscal year ended March 31, “due to aggressive efforts to upgrade the MOL fleet and reduce costs, as well as a strong ocean shipping market.”
MOL raised its operating income 86 percent to Yen171.7 billion ($1.6 billion) from Yen92.1 billion in the year earlier. MOL’s revenue improved 8 percent to Yen1.1 trillion ($11 billion) from the Yen997.2 billion revenue of the previous year.
“In ocean shipping, our main business, both containerships and bulk carrier/specialized carrier operations enjoyed robust cargo growth and strong freight rates,” MOL said.
MOL’s container shipping arm increased its revenue 15.9 percent to Yen400.3 billion ($3.7 billion) from Yen345.4 billion, with operating profit more than doubling to Yen54.2 billion ($505 million) as compared to Yen23.4 billion in the previous fiscal year.
“Key east/west routes saw a continuous upward trend throughout the year, building on the recovering worldwide economy,” MOL said. The Japanese group also said the traditionally slack winter season saw more cargo traffic.
MOL said the results were attained despite higher bunker prices and congestion at ports in North America and Europe.
MOL’s said it has revised its three-year management plan covering April 2004 to March 2007 called “MOL STEP” (Mitsui O.S.K. Lines’ Strategy towards an Excellent and Powerful Group) with “MOL STEP Review” after exceeding its initial goal the last fiscal year.
MOL’s revised financial goals for fiscal year 2005, which ends March 31, are net income of Yen113 billion ($1 billion) compared to Yen57 billion in the original plan. Operating income predictions are now Yen176 billion ($1.6 billion) from Yen110 billion, and revenue of Yen1.21 trillion ($11.3 billion) are expected, from Yen1.1 trillion.
For fiscal year 2006, MOL’s anticipates that net income will jump to Yen122 billion ($1.15 billion) from the originally stated Yen64 billion. Operating income will reach Yen186 billion ($1.75 billion), up from Yen115 billion. Revenues will rise to Yen1.25 trillion ($11.7 billion) compared to the Yen1.1 trillion originally forecast.
MOL also said it intends to invest in 287 vessels by the end of fiscal year 2009 at a cost of Yen1.45 trillion ($13.6 billion). The original plan was for 243 ships costing Yen1.16 trillion.
MOL said the revised forecasts were created “taking into account MOL’s expanding fleet and the latest forecasts for the ocean shipping market.”