Strong shipping market boosts NYK’s profits

Strong shipping market boosts NYK’s profits    Japan’s NYK increased its consolidated net income 53 percent to 52.7 billion yen ($506 million) in the nine-month period ended Dec. 31, compared with Yen34.5 billion a year earlier, with improved results from all shipping sectors and from port services.
   The latest shipping group to report a marked improvement in its financial results, NYK boosted its operating income 76 percent to Yen122.4 billion ($1.2 billion) from Yen69.4 billion in the nine-month period ended Dec. 31, 2003. The Japanese group increased its operating margin as a percentage of revenue to 10 percent from 7 percent a year earlier.
   The strong results led NYK to raise its profit forecast for the full financial year ending March 31. It now expects to earn a net income of Yen65 billion ($631 million), nearly twice the net income of Yen34.8 billion ($329 million) made in the year ended March 31, 2004. NYK also forecasts an annual revenue of Yen1.6 trillion ($15.5 billion).
   Commenting on its activities during the April-December period, NYK said liner demand on all routes — North America, Europe, Oceania, Asia and Central and South America — was solid. “A recovery in freight rates, coupled with ongoing cost-reduction measures, prompted sharp increases in revenues and profits, compared with the same period of the previous term,” the group said. Operational difficulties on the U.S. West Coast of North America caused by labor shortages began easing in November, it added.
   Revenue from the liner division of NYK rose 18 percent in the nine-month period ended Dec. 31 to Yen339.5 billion ($3.3 billion), catching up the revenue from the company’s largest division — trampers and specialized carriers.
   The trampers and specialized carriers division, which includes dry bulk and car-carrier activities, increased its revenue 14 percent in the latest nine-month period to Yen341.2 billion ($3.3 billion). Car carrier transport volume benefited from ongoing strong exports to the Middle East, as well as Australia, while market conditions for bulk carriers were bullish during the third quarter, NYK said.
   The tanker division, NYK’s third shipping division, reported an 8-percent rise in revenue to Yen78.2 billion ($750 million) in the nine-month period. NYK cited “record-high crude oil tanker market conditions,” with the world scale index peaking at 300 at one point during the latest period.
   Within the non-shipping activities of NYK, its air cargo business remained strong, but warehouse activities were affected by congestion on the U.S. West Coast, leading to a fall in profit. Benefiting from strong container handling volume worldwide, NYK’s terminal and harbor transport arm “fulfilled its performance,” NYK said.
   The largest Japanese shipping group also cited higher volumes and freight rates in the shipping segment during the quarter ended Dec. 31.