“K” Line first quarter revenue up, but profit down as oil costs mount
“K” Line first quarter revenue up, but profit down as oil costs mount
Japanese ocean carrier “K” Line on Thursday reported a 16.5 percent decline in first quarter net profit, to $201.5 million.
The carrier cited slower cargo volumes to the United States and rising fuel prices as reasons for the drop. “K” Line profits grew 61 percent in the 2007 fiscal year.
While profit dropped, revenue for the fiscal first quarter ending June 30 reached $3.3 billion, a 13 percent rise over the same period in 2007.
“The average freight rates for the first quarter of fiscal 2008 generally exceeded those in the same period of the previous year, but higher freight rates were unable to absorb increased operating costs, including fuel oil costs,” “K” Line said in a statement. “As a result, operating revenues increased but profits declined on a year-on-year basis.”
Fuel costs are taking such a toll on operations that the carrier said it has revised its forecasts upward for bunker costs for the rest of the year. It is projecting bunker to go for $700 per metric ton in the second quarter ($180 higher than first forecast) and $750 per metric ton in the second half of the fiscal year ($230 higher than first forecast).
Most of “K” Line’s other business units — dry bulk, tankers, car carriers and coastal shipping — reported earnings at levels the carrier expected.