“K” LINE REPORTS LOWER HALF-YEAR PROFIT

“K” LINE REPORTS LOWER HALF-YEAR PROFIT

“K” LINE REPORTS LOWER HALF-YEAR PROFIT

   “K” Line earned a net income of 4.9 billion yen ($40 million) for six-month period ended Sept. 30., a 35-percent decrease from its Yen7.5 billion half-year net profit in a year earlier.

   Group revenues increased by 4 percent, to Yen309.6 billion ($2.5 billion), from Yen297.7 billion.

   Operating income for the April-September period dropped to Yen11.3 billion ($92 million), from Yen17 billion.

   Commenting on its half-year results, “K” Line said that fuel prices increased during the latest period, but the recovery of the tramp and tanker markets, and of freight rate levels in container shipping, was delayed.

   Despite a stronger-than-expected increase in container volumes, “K” Line said that container service profitability deteriorated. Freight rates in “K” Line’s North American container services went down “significantly,” while freight rates in European services in its fiscal first-half period were lower than a year before.

   “However, freight rates gradually commenced to show some signs of recovery in both services during the first half as a result of our desperate efforts for restoration,” a spokesman for “K” Line said.

   The Japanese group predicts that its fiscal second half, covering the period from October 2002 to March 2003, will be much better than a year ago. “K” Line cited positive factors such as recent cost cuts, the introduction of more efficient containerships and the rationalization of its transatlantic services.