NYK back in black after posting first half profit of US$146.7 million
JAPAN's leading ocean carrier, Nippon Yusen Kabushiki Kaisha (NYK) was back in the black with a first half profit of JPY15
JAPAN's leading ocean carrier, Nippon Yusen Kabushiki Kaisha (NYK) was back in the black with a first half profit of JPY15.8 billion (US$146.7 million), after suffering a year-on-year 2018 net loss of JPY4.2 billion. First half revenues came in at JPY824.7 billion. down 9.9 per cent.
NYK is forecasting operating profit of JPY40.5 billion for the 2019-20 fiscal year, up from the JPY34.5 billion it had forecast on July 31.
NYK, along with MOL and 'K' Line, owns the liner container shipping company Ocean Network Express (ONE). NYK is also involved in bulk shipping, logistics, air cargo transportation, real estate and other sectors.
NYK saw its six-month container liner revenue decline 31 per cent year on year to JPY103.6 billion in the six months ending June 30, 2019, but 'as a whole, the business performance greatly improved, and a profit was recorded' of JPY9.7 billion compared to a year-on-year loss of JPY18.8 billion.
Similarly, NYK said air forwarding business saw slow demand in Japan and Asia, and handling volumes fell. Ocean forwarding also saw handling volume drop significantly because of the US-China trade war.
NYK's logistics revenue was JPY238.2 billion in the first six months of the fiscal year, down 10.4 per cent, and recurring profit was JPY2.3 billion, a drop of 28 per cent.
'In the logistics business, the results were generally strong, including progress in the initiatives aimed at improving profitability in Europe,' the company said.
NYK said in its car transportation division, shipping traffic was strong to North America and within Asia.
While more dry bulk ships were commissioned than scrapped, NYK said increased dry dockings, primarily by Capesize bulk carriers installing exhaust scrubbers in advance of the sulphur cap promulgated by the International Maritime Organization, resulted in an improved market.
'Cargo volumes of iron ore are recovering from the supply disruptions that occurred in Brazil and Western Australia at the end of the previous fiscal year. In addition, cargo volumes of coal and grain were firm.'
In the tanker industry, NYK said markets improved for VLCCs following the attacks on tankers near the Strait of Hormuz in May and June and the drone attack on Saudi Arabian oil facilities in September. It also said shipping traffic became more active for petrochemical tankers.
It said the market for liquefied petroleum gas tankers benefited from more shipments from the US to Asia, and liquefied natural gas tankers benefited from 'long-term contracts that generate stable earnings.'
Overall the company's bulk shipping segment recorded a profit of JPY14.2 billion in the first half of the company's fiscal year, 10 per cent less than in 2018, while revenues were JPY400.3 billion, down 3.5 per cent.