MOL, “K” Line double annual operating profits
MOL, “K” Line double annual operating profits
Mitsui O.S.K. Lines and “K” Line both doubled their operating profits in their fiscal year ended March 31, with each Japanese group earning more than $600 million in operating income after a buoyant year that lifted all the sectors of their shipping operations.
MOL raised its operating income 103 percent to Yen92.1 billion ($872 million) from Yen45.4 billion in the year earlier. The group’s net income soared 277 percent to Yen55.4 billion ($524 million) from Yen14.7 billion. MOL’s revenue improved 10 percent to Yen997.3 billion from the Yen910.3-billion revenue of the previous year.
“K” Line's operating income increased 141 percent Yen70.5 billion ($667 million) from Yen29.3 billion.
The net income of Japan’s third-largest shipping group jumped 220 percent to Yen33.2 billion ($314 million) from Yen10.4 billion, and its revenue increased 15 percent to 724.7 billion ($6.9 billion).
MOL and “K” Line reported improved profits from both container and bulk shipping, their two main activities.
“Robust trade volume, mainly in China, for the liner, bulk and tanker markets, along with a generally favorable freight rate market, spurred increases in revenue and income,” MOL said. The group also reported efforts to lower its costs, despite higher bunker and vessel charter prices, a negative yen exchange rate and congestion at loading ports.
In container shipping, the restoration of freight rates resulted in “a great increase in earnings” from the previous fiscal year, MOL said.
MOL’s container shipping arm increased its revenue 16 percent to Yen 323 billion ($3 billion) from Yen278 billion, and made an operating profit of Yen 20 billion (about $200 million) as compared to a loss of Yen9 billion (about $100 million).
MOL predicts it will raise its container shipping revenue another 15 percent to Yen370 billion (about $3.5 billion), during the current fiscal year ending in March 2005, and will lift its operating profit from these activities 50 percent to Yen30 billion (about $300 million).
MOL also reported a modest profit of about Yen200 million ($2 million) from forwarding and warehousing activities, on revenue of Yen46.9 billion ($444 million) in the fiscal year ended March 31.
“Business circumstances surrounding the shipping industry, such as the remarkable expansion of Chinese exports and imports and stabilized economies of Europe/U.S.A. contributed to tonnage moving in a brisk way,” “K” Line said in its financial statement. “Against this backdrop of circumstances, freight rates improved in all business sectors.”
“K” Line said the Iraq war and SARS epidemic had little effect on its container shipping business. In fact, container volumes in the transpacific and Asia/Europe trades rose strongly, and freight rates “normalized” at a higher level, the Japanese group said. The carrier, which did not disclose specific financial figures on its container arm, said the recovery of its operating income from container shipping during the fiscal year was “greater than earlier targeted,” despite higher fuel prices and the adverse impact of the strong yen.
NYK will report its results for the fiscal year ended March 31 on Monday.