MOL prepares for another tough year

MOL prepares for another tough year    MOL said it had net profit of 127 billion yen ($1.3 billion) in its fiscal year ending March 31, a 33 percent decline from the prior year.
   The Japanese shipping line said it expected further declines in profit this year, but that it assumed the market would begin to show some recovery this summer.
   Revenue for the fiscal year was 1.86 trillion yen ($19 billion), a 4 percent decline from the prior year. Revenue from containerships dropped 7 percent to 641 billion yen ($6.6 billion).
   The company said it “laid up surplus vessels to reduce space and offset the fall in cargo trade, including that on the major Asia/North America (eastbound) and Asia/Europe (westbound) routes. We also took action to minimize losses on routes where competition is intense and profitability difficult or impossible to achieve, including discontinuing some services such as the Asia/Black Sea service.”
   The company said volume on Asia-to-North America eastbound routes declined 10 percent.
   Looking forward, the company forecast a further 25 percent drop in revenue and 68 percent drop in profit this year.
   “Ocean shipping markets for dry bulk ships, tankers and containerships have slowed down in step with the global economic downturn, but China’s economic index in particular is showing signs that the slump has bottomed out,” the company said in a statement.
   “We assume that the market will show a degree of recovery starting in the summer of 2009. In addition we plan to push forward with our group-wide 40 billion yen cost reduction efforts and ensure stable long-term profits.”