Japan's largest shipping company, Nippon Yusen KK. (NYK Lines), said on Friday its net profit hit a record high in the year ended March, driven by improved freight rates and increased volume of cargo handled.
Citing continued expansion of economies in emerging markets, the company said it expects to post another record-breaking performance in the current fiscal year, which started this month.
Net profit soared to 114.1 billion yen ($1.1 billion) in the year just ended, compared with 65.0 billion yen in the year to March 2007, the company said.
Pretax profit jumped 84.6 percent to 198.5 billion yen.
Operating profit surged 92.6 percent to 202.8 billion yen.
Revenue expanded 19.4 percent to 2.58 trillion yen, boosted by strong demand in emerging markets, including China.
The results were off the company's own forecast made in January, which put net profit at 120 billion yen, pretax profit at 200 billion yen and revenue at 2.58 trillion yen.
"While a set of numbers showing higher yen rates and bunker fuel prices served as negative factors for us, a recovery in freight rates for both the container service and dry bulk cargo allowed us to absorb such negative factors and achieve our best-ever performance," NYK Lines managing director Makoto Igarashi told a press conference.
The liner trade division, covering the container service, posted a pretax profit of 11.5 billion yen, reversing a pretax loss of 9.8 billion yen a year earlier.
"Cost cuts and a levy on bunker surcharge also contributed to the turnaround," Igarashi said.
Its other shipping division, covering the dry bulk cargo service, logged a pretax profit of 174.1 billion yen, up from 104.3 billion yen.
The Baltic Dry Index, which tracks rates on 40 routes around the world, surged to 7,758 in the year to March 2008 from 3,750 in the previous fiscal year.
"Although we now forecast the BDI will come down to 6,700 in the current fiscal year, if the most recent price level were to continue, we may see some upside potential (to earnings this year)," Igarashi said. The BDI stood at 8,500 on Thursday. In the fiscal year just ended, the higher yen and fuel costs subtracted a combined 32.6 billion yen from the company's annual pretax profit.
NYK Lines is proposing an annual dividend of 24 yen per share, compared to 18 yen per share paid in the year to March 2007
For the current fiscal year to March 2009, the company expects net profit of 140 billion yen, up 22.7 percent from the year earlier, operating profit of 214 billion yen, up 5.9 percent and revenue of 2.7 trillion yen, up 4.5 percent.
NYK Lines assumes that bunker fuel costs will average $500 per tonne this fiscal year, up from $402.77. The dollar is expected to average 100 yen, compared to 115.29 yen a year earlier.
The company plans to pay an annual dividend for this year of 26 yen per share.
"Given solid demand, the recovery in freight rates will continue mainly for the European route," Igarashi said.
NYK Lines shares closed the morning up 0.3 percent at 1,012, ahead of the announcement of the results.
Citing continued expansion of economies in emerging markets, the company said it expects to post another record-breaking performance in the current fiscal year, which started this month.
Net profit soared to 114.1 billion yen ($1.1 billion) in the year just ended, compared with 65.0 billion yen in the year to March 2007, the company said.
Pretax profit jumped 84.6 percent to 198.5 billion yen.
Operating profit surged 92.6 percent to 202.8 billion yen.
Revenue expanded 19.4 percent to 2.58 trillion yen, boosted by strong demand in emerging markets, including China.
The results were off the company's own forecast made in January, which put net profit at 120 billion yen, pretax profit at 200 billion yen and revenue at 2.58 trillion yen.
"While a set of numbers showing higher yen rates and bunker fuel prices served as negative factors for us, a recovery in freight rates for both the container service and dry bulk cargo allowed us to absorb such negative factors and achieve our best-ever performance," NYK Lines managing director Makoto Igarashi told a press conference.
The liner trade division, covering the container service, posted a pretax profit of 11.5 billion yen, reversing a pretax loss of 9.8 billion yen a year earlier.
"Cost cuts and a levy on bunker surcharge also contributed to the turnaround," Igarashi said.
Its other shipping division, covering the dry bulk cargo service, logged a pretax profit of 174.1 billion yen, up from 104.3 billion yen.
The Baltic Dry Index, which tracks rates on 40 routes around the world, surged to 7,758 in the year to March 2008 from 3,750 in the previous fiscal year.
"Although we now forecast the BDI will come down to 6,700 in the current fiscal year, if the most recent price level were to continue, we may see some upside potential (to earnings this year)," Igarashi said. The BDI stood at 8,500 on Thursday. In the fiscal year just ended, the higher yen and fuel costs subtracted a combined 32.6 billion yen from the company's annual pretax profit.
NYK Lines is proposing an annual dividend of 24 yen per share, compared to 18 yen per share paid in the year to March 2007
For the current fiscal year to March 2009, the company expects net profit of 140 billion yen, up 22.7 percent from the year earlier, operating profit of 214 billion yen, up 5.9 percent and revenue of 2.7 trillion yen, up 4.5 percent.
NYK Lines assumes that bunker fuel costs will average $500 per tonne this fiscal year, up from $402.77. The dollar is expected to average 100 yen, compared to 115.29 yen a year earlier.
The company plans to pay an annual dividend for this year of 26 yen per share.
"Given solid demand, the recovery in freight rates will continue mainly for the European route," Igarashi said.
NYK Lines shares closed the morning up 0.3 percent at 1,012, ahead of the announcement of the results.