Japan’s ‘Big Three’ shipping companies – Mitsui OSK Lines (MOL), NYK Line, and Kawasaki Kisen Kaisha (‘K’ Line) – all posted a higher profit for the three months ending 30 June.
As Japan’s financial year starts on 1 April, April to June marks the first quarter of the companies’ financial year.
MOL, led by Junichiro Ikeda, posted a JPY12.783 billion (USD104.39 million) profit for the period, up from JPY8.5 billion profit for the same period in 2014.
NYK, headed by Tadaaki Naito, posted a JPY43 billion profit for the period, rocketing 321.3% y/y from the JPY10.2 billion profit for the same period in 2014.
‘K’ Line, under its CEO Eizo Murakami, posted a JPY10.194 billion profit for the period, more than doubling the JPY4.28 billion profit for the same period in 2014.
MOL credited its improved performance to slow steaming, ongoing cost management, and higher tanker freight rates.
Its container shipping unit, which has been unprofitable for some time, managed to lower its quarterly loss, booking a JPY5 billion loss for the period, compared with a JPY7.2 billion loss for the same period in 2014.
Overall, MOL benefited from the recovery in oil tanker freight rates and the firm very large gas carrier freight market.
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MOL said, “The VLCC [very large crude carrier] market was strong as the ocean transport of crude oil was stimulated by growth in actual demand and an increase in the nation’s strategic petroleum reserves because of lower crude oil prices. The LPG carrier market recovered from February, due mainly to an increase in cargo volumes resulting from an LPG export terminal in the United States becoming newly operational and an increase in demand for transportation to India, and the market was firm overall.”
NYK managed to return its liner shipping business to profitability, with the unit booking a JPY3.9 billion gain for April to June, reversing a JPY100 million loss for the same period in 2014.
Its bulk shipping unit’s profit also rose from JPY11.9 billion to JPY14.4 billion over the same period.
NYK said that vigorous cost management, including redelivering uneconomical vessels and deploying fuel-efficient ships, helped to improve earnings for its liner shipping business. It also expanded shipments from North America to Europe and South America.
‘K’ Line’s liner shipping unit almost doubled its profit from JPY2.2 billion to JPY4.1 billion over the same period. The company’s bulk shipping unit also raised its profit from JPY6.4 billion to JPY10.4 billion.
‘K’ Line said that although container cargoes declined because of lower demand on Asia-Europe and intra-Asia routes, trans-Pacific cargoes were stable. The company also benefited from cheaper bunker prices.
Like MOL, ‘K’ Line said revenue from its oil tankers and LPG carriers rose year on year as the freight market recovered.