NYK Line and “K” Line got back into the black during the six months ended Sept. 30 after posting losses in the same 2016 period, while MOL’s earnings took a hit despite all three recording year-over-year increases in revenues.
Japan’s three largest ocean shipping companies – Nippon Yusen Kabushiki Kaisha (NYK Line), Mitsui O.S.K. Lines, Ltd. (MOL) and Kawasaki Kisen Kaisha, Ltd. (“K” Line) – appear to be righting the ship when it comes to their individual financial results.
For the first six months of their fiscal 2017 year, which ended Sept. 30, NYK and “K” Line, both of which reported a loss for the corresponding prior year period, turned a profit, while MOL’s earnings declined despite all three companies recording a year-over-year boost in revenues.
Although volumes remained steady during the six-month period, spot rates remained lackluster due to the introduction of additional capacity.
NYK
NYK recorded profits attributable to owners of the parent of 6.3 billion yen (U.S. $55.5 million) for the six months ending Sept. 30, a marked turnaround from a loss of 231.8 billion yen for the same period a year earlier.
Consolidated revenues totaled 1.1 trillion yen, surging 14.6 percent year-over-year.
NYK’s liner trade segment posted a recurring profit of 13.3 billion yen, up from a loss of 15.3 billion yen, on revenues that rose 24.9 percent to 350.5 billion yen compared with the same 2016 period.
“Overall handling volume at container terminals in Japan and around the world increased year-on-year,” NYK said. “In the container shipping market, while the supply of tonnage remained at similarly high levels as the previous fiscal year, spot freight rates stayed mostly favorable on the back of brisk shipping traffic.”
MOL
MOL’s profits attributable to owners of the parent, on the other hand, tumbled 18.3 percent year-over-year to 13.1 billion yen for the six months ending Sept. 30, even as the company’s revenues surged 14.8 percent to 818.9 billion.
In the containership segment, MOL record a segment loss of 4.1 billion yen, a sharp improvement from a 21.4 billion yen loss for the corresponding prior year period. Meanwhile, the segment’s revenues totaled 374.2 billion, up 27.9 percent year-over-year.
“In the containership freight market, on the Asia-North America routes, the highest ever cargo volumes from Asia were recorded due to the robust U.S. economy, and on the Asia-Europe routes, cargo volumes from Asia also proceeded steadily,” MOL said. “Nevertheless, spot freight rates over the busy summer season were lackluster largely due to a growing capacity supply brought about by launches of large containerships.”
Looking ahead, MOL said it expects stronger demand in the containership market than usual with respect to cargo volumes from Asia across every route.
“K” Line
“K” Line recorded profits attributable to owners of the parent of 13.2 billion yen for the six months ending Sept. 30, up from a loss of 50.5 billion yen for the same period a year prior. Operating revenues totaled 578.9 billion yen, a 17.9 percent increase.
In the containership segment, “K” Line recorded a segment profit of 9 billion yen, up from a loss of 21 billion yen for the corresponding prior year period, while operating revenues jumped 23.3 percent to 304.4 billion yen.
“K” Line’s container handling volumes increased 6 percent year-over-year, led primarily by strong demand increases on the Asia-Europe and intra-Asia trades.
According to ocean carrier capacity database BlueWater Reporting’s Carrier Ranking tool, NYK has an operating fleet capacity of 608,248 TEUs, while MOL’s operating fleet capacity stands at 554,578 TEUs and “K” Line’s operating fleet capacity totals 337,029 TEUs. All three carriers are members of “THE” Alliance, a vessel sharing agreement on major east-west trades that commenced this April, which also includes Hapag-Lloyd of Germany and Yang Ming of Taiwan.
On Oct. 31, 2016, NYK, MOL and “K” Line entered into an agreement to integrate their container shipping businesses, including worldwide terminal operations outside of Japan.
On July 7, they established a new holding company in Tokyo, dubbed Ocean Network Express Holdings, Ltd.; and a new operating company in Singapore, referred to as Ocean Network Express Pte. Ltd. The newly merged company is scheduled to begin offering container shipping services from April 1, 2018.