Japanese carriers? profits hurt by liner downturn

Japanese carriersÆ profits hurt by liner downturn The three big Japanese shipping groups, NYK, 'K' Line and MOL, all reported lower profits for the nine-month period ended Dec. 31, due to poorer results in their container shipping units.
   NYK, the largest of the three carriers, saw its net income slide 36 percent to Yen48.7 billion ($401 million). Its operating income dropped by the same margin to Yen77 billion ($634 million). NYK's revenue improved 12.5 percent to Yen1.6 trillion ($13.2 billion).
   NYK's container shipping revenue for the nine months gained 7 percent to Yen431.6 billion ($3.5 billion) but profits for the sector were down overall, NYK said.
   'In the liner trade ' freight volumes were firm during the nine months under review,' NYK said. 'While freight-rates recovered in the Asia/Europe and Asia/Australia routes, the increases were not enough to offset the impact of the rate declines from the end of 2005 through the beginning of 2006.
   'The bunker oil price, which had been hovering at high levels since the beginning of the current fiscal year, started to come down, though it is still at comparatively high levels. As a result, the liner trade segment registered a large decline in its overall business performance compared with the same period a year ago,' NYK said.
   MOL's net income for the nine months declined 2.7 percent to Yen87.6 billion ($722 million) while operating income dipped 12.5 percent to Yen120.6 billion ($992 million). MOL's revenue gained 14.3 percent to Yen1.16 trillion ($9.6 billion).
   MOL's ordinary income from its containerships division slumped to Yen1 billion ($8 million) from Yen38 billion in the same period a year before. This was despite a liner revenue increase of 16 percent to Yen424 billion ($3.5 billion).
   'K' Line posted net income for the nine-month period of Yen35.6 billion ($293 million), down 35.9 percent compared with the prior year period. 'K' Line's operating income slumped 42.6 percent to Yen39.7 billion ($328 million), while group revenue rose 16.2 percent to Yen800.5 billion ($6.6 billion).
   'Profits in the containership business declined on a year-on-year basis, affected by highly hovering fuel oil prices and slumping market freight rates mainly in the Asia/Europe service routes,' 'K' Line said.