Japanese carriers ride profit wave

Japanese carriers ride profit wave Japanese shipping groups NYK Line and “K” Line today both reported higher profits for their first quarter 2007 fiscal year ended June 30, with both pointing to a rebound in the container shipping sector.
   NYK’s net income for the quarter soared 131.9 percent to Yen28.6 billion ($232.4 million), from Yen12.4 billion a year ago. Operating income improved 74.6 percent to Yen39.3 billion ($319.1 million), compared to Yen22.5 billion in the previous fiscal year. NYK’s revenue improved 14.6 percent to Yen601.3 billion ($4.9 billion).
   In the container-shipping sector, NYK’s revenue grew 6.1 percent to Yen155.1 billion ($1.26 billion), up from Yen146.2 billion.
   “Against a background of solid performance overall in freight markets, freight rates recovered to a certain degree, although there were differences depending on routes,” NYK said. “Even as bunker oil prices persisted at high levels, the recovery in freight rates, along with cost reductions, lead to increases in revenues and profits in comparison to the same period in the previous year.”
   The improved business environment caused NYK to raise its financial expectations for the year and now expects consolidated net income of Yen100 billion, up 22 percent over its previous forecast. Consolidated revenue expectation has been raised 7.6 percent to Yen2.41 trillion.
   “K” Line posted quarterly consolidated net income of Yen25.8 billion ($209.3 million), up 165.9 percent compared with the prior year period, while its operating income gained 222.5 percent to Yen32.3 billion ($262.1 million). Group operating revenue rose 22.6 percent to Yen309.2 billion ($2.5 billion).
   Discussing its containership business, “K” Line said: “The company succeeded in restoring freight rates for the European services in April and for the North American services in May this year. As a result, operating results for the first quarter of fiscal 2007 exceeded initial projections, increasing both its operating revenues and profits against the same period last year.”
   The company expects net income of Yen40 billion for the full year on revenue of Yen1.23 trillion.
   Mitsui O.S.K. Lines will publish its first quarter results Friday.