“K” LINE INCREASES GROUP PROFIT FORECAST

“K” LINE INCREASES GROUP PROFIT FORECAST

“K” LINE INCREASES GROUP PROFIT FORECAST

   “K” Line has revised upwards its group profit forecast for the current fiscal year, ending in March 2003, following favorable trends seen during the first half of the fiscal year.
   Operating revenues for the year are now expected to amount to 610 billion yen ($4.9 billion), compared to an earlier forecast of Yen600 billion. Ordinary income for the year should be Yen15.5 billion ($124 million), not Yen14.5 billion, and net income should amount to Yen9.5 billion ($76 million), up from a previous forecast of Yen9 billion.
   The revised figures for the current fiscal year are also higher than the actual figures for the previous fiscal year, ended in March 2002, when revenue was Yen571 billion, ordinary income Yen12 billion and net income Yen5 billion.
   During the first-half period of the current fiscal year (April to September), profits are estimated to have improved, as compared to earlier forecasts, despite an exchange loss, “K” Line said.
   The Japanese group said that it has overcome adverse factors, such as higher-than-prospected Yen and bunker oil price, “low-key markets” for bulk carriers and tankers and a drop in container freight rates.
   “K” Line has experienced “a big increase in container loadings by launching a new series of larger-sized containerships that has been synchronized with increasing cargo movement mainly from China to North America/Europe, and also with a more-than-expected increase in loadings transported in car-carrier business.” In addition, “K” Line said that it has cut its costs.
   For the rest of the current fiscal year, “K” Line predicts “movements of container cargo and vehicles staying as steady as during the first half, and (the) likelihood of recovery in container freight rates on the container trunk service routes.”
   It is known that carrier agreements and conferences have recently announced substantial increases in rates in the eastbound transpacific, westbound Asia-to-Europe and westbound Europe-to-U.S. liner trades. Until recently, however, shipping lines that publish data on container freight rates have reported an ongoing erosion of average freight rates.