Tokyo's Nippon Yusen Kabushiki Kaisha (NYK Line) has announced a net loss of JNY26.6 billion (US$289.6 million) for the last nine months of 2009 against a year on year 2008 profit of JNY110.2 billion, representing a decline of 85.9 per cent.
This covers the first three quarters of the company's fiscal year and was drawn on revenues of JPY1.2 trillion in 2009 compared to the JNY2.03 trillion sales figure the year before.
The shipping line, rated the world's ninth, revised its full year forecast for its fiscal year ending March 31, now expecting revenues rising to JPY1.7 trillion from the JPY1.6 trillion previously predicted and with year-end losses standing at JPY29 billion compared to the JPY27 billion earlier assessment.
"In the fiscal third quarter (October 1 - December 31), shipping operators' business environment recovered to a degree amid signs that the global economic downturn was bottoming out," said the company statement accompanying the results.
"Overall revenue in the shipping segment (composed of the liner trade and bulk shipping) was down JPY168.6 billion, or 27.6 per cent versus the year-ago third quarter, despite positive contributions from efforts to restore container freight rates, container and car transport volumes that exceeded the fiscal second quarter's, and a moderate upturn in the dry bulk market," the statement said.
On the other hand, third quarter costs and expenses were down JPY124.6 billion, or 24.2 per cent year on year, NYK said, adding that it then began addressing the problem of cutting selling, general and administrative expenses.
"Because of the decline in revenues, operating income decreased by JPY31.5 billion, or 86.4 per cent, compared with the year-ago third quarter, and the ratio of operating income to revenues decreased from six per cent to one per cent, a decline of 4.9 percentage points.
As a result, recurring profit decreased by JPY24.4 billion, or 89.5 per cent, and net income decreased by JPY16.3 billion, or 85.9 per cent, compared with the year-ago third quarter, both significant declines.
In containers, NYK continued efforts to consolidate our fleet, and average freight rates were up versus the fiscal second quarter on almost all routes as the supply and demand balance improved with transport volumes retreating only minimally during the low-demand winter season.
"We also continued efforts to cut costs by reducing the number of vessels in operation and other means, and results for some routes, including European and Latin American routes, were up year over year, but the liner trade segment overall significantly under performed the year-ago third quarter," said the statement.
The car carrier division volume was down to 70 per cent year on year. Dry bulk division did better "as emerging economies in Asia, such as China and India, continued to grow and developed economies recovered, steel and energy demand rose, volumes of iron ore, coal, and grains transported increased, and we also saw shipping congestion in Australia".
Freight rates in the dry bulk market remained firm, despite turbulent swings, and touched its highest point for 2009 in November. Consequently, the dry bulk carrier division's profit was up versus the year-ago third quarter, when freight rates in the bulk market hit historic lows.
The tanker division usually encounters strong demand in winter season, said NYK, but large stockpiles of crude oil and petroleum products in developed countries resulted in subdued transport volumes. Yet tanker rates trended upward toward the end of the calendar year, said the statement.
"But the heavy pressure on the market from the supply of newbuildings was unabated, resulting in lower profit in the tanker division versus the year-ago third quarter," said the NYK statement.
This covers the first three quarters of the company's fiscal year and was drawn on revenues of JPY1.2 trillion in 2009 compared to the JNY2.03 trillion sales figure the year before.
The shipping line, rated the world's ninth, revised its full year forecast for its fiscal year ending March 31, now expecting revenues rising to JPY1.7 trillion from the JPY1.6 trillion previously predicted and with year-end losses standing at JPY29 billion compared to the JPY27 billion earlier assessment.
"In the fiscal third quarter (October 1 - December 31), shipping operators' business environment recovered to a degree amid signs that the global economic downturn was bottoming out," said the company statement accompanying the results.
"Overall revenue in the shipping segment (composed of the liner trade and bulk shipping) was down JPY168.6 billion, or 27.6 per cent versus the year-ago third quarter, despite positive contributions from efforts to restore container freight rates, container and car transport volumes that exceeded the fiscal second quarter's, and a moderate upturn in the dry bulk market," the statement said.
On the other hand, third quarter costs and expenses were down JPY124.6 billion, or 24.2 per cent year on year, NYK said, adding that it then began addressing the problem of cutting selling, general and administrative expenses.
"Because of the decline in revenues, operating income decreased by JPY31.5 billion, or 86.4 per cent, compared with the year-ago third quarter, and the ratio of operating income to revenues decreased from six per cent to one per cent, a decline of 4.9 percentage points.
As a result, recurring profit decreased by JPY24.4 billion, or 89.5 per cent, and net income decreased by JPY16.3 billion, or 85.9 per cent, compared with the year-ago third quarter, both significant declines.
In containers, NYK continued efforts to consolidate our fleet, and average freight rates were up versus the fiscal second quarter on almost all routes as the supply and demand balance improved with transport volumes retreating only minimally during the low-demand winter season.
"We also continued efforts to cut costs by reducing the number of vessels in operation and other means, and results for some routes, including European and Latin American routes, were up year over year, but the liner trade segment overall significantly under performed the year-ago third quarter," said the statement.
The car carrier division volume was down to 70 per cent year on year. Dry bulk division did better "as emerging economies in Asia, such as China and India, continued to grow and developed economies recovered, steel and energy demand rose, volumes of iron ore, coal, and grains transported increased, and we also saw shipping congestion in Australia".
Freight rates in the dry bulk market remained firm, despite turbulent swings, and touched its highest point for 2009 in November. Consequently, the dry bulk carrier division's profit was up versus the year-ago third quarter, when freight rates in the bulk market hit historic lows.
The tanker division usually encounters strong demand in winter season, said NYK, but large stockpiles of crude oil and petroleum products in developed countries resulted in subdued transport volumes. Yet tanker rates trended upward toward the end of the calendar year, said the statement.
"But the heavy pressure on the market from the supply of newbuildings was unabated, resulting in lower profit in the tanker division versus the year-ago third quarter," said the NYK statement.