JapanÆs Big 3 see red
Japan's big three carriers saw revenues fall significantly amid operating losses in the first half of their fiscal year, continuing a trend of steep losses industry-wide for liner carriers.
MOL on Tuesday reported first half revenue dropped nearly 43 percent to $6.9 billion. The carrier, which includes bulk and car carrier divisions, had an operating loss of $127 million, a reversal from $1.5 billion in operating profit in the corresponding 2008 period.
MOL said rate negotiations on the transpacific in April and May yielded unfavorable rate levels caused by a skewed supply-demand balance.
It said that during the second quarter of its year, liner carriers were 'seriously aware of their large, ever-worsening deficits with a market environment too harsh to endure.' MOL said the industry's rate restoration efforts have gone some way to helping redress the balance, but the restorations 'will take some time to firmly take effect.'
MOL was, however, helped in the second half by a rebound in the dry bulk market.
'K' Line, meanwhile, saw revenue recede 45.5 percent to $4.4 billion. Its operating loss was $471 million, compared to a profit of $705 million in the first half of 2008. The carrier said eastbound transpacific volume fell 11 percent, part of a global 6 percent drop in volume.
'K' Line said its 2009 year-end numbers will likely not meet projections it made at the beginning of the fiscal year (which runs April through March), and the company said it would not be paying a dividend to shareholders.
NYK Line also saw revenue dip, by 44 percent, to $8.8 billion. The carrier had a first half operating loss of $410 million, after earning $1.2 billion in the same period in 2008.
The line said container freight rate levels are increasing but operating costs are increasing as well, to such an extent that the line doesn’t “anticipate reaching our current cost-reduction targets.”
NYK also said it has revised down its projected revenue for the year by 1.8 percent to $18.3 billion, while it now projects an operating loss for the year of $195.6 million. In July the line had forecast an operating profit of $217 million.
The interim financial figures for all three lines include all divisions, not just container shipping.