NYK Line posts results for the fiscal first quarter
Tokyo headquartered shipping line Nippon Yusen Kabushiki Kaisha (NYK Line) has released its results for the fiscal first quarter ended June 30, 2012 posting a net loss of ¥1.33 billion, (-$16.48 million) compared with net loss of ¥7.15 billion (-$91 million) for the same period last year, Ship & Bunker reports.
Consolidated revenues improved to ¥477.5 billion ($5.9 billion), versus ¥447.7 billion ($5.7 billion) for the first quarter 2011, saying the net loss for the quarter was due to loss on valuation of investment securities.
"The shipping market slump is expected to continue for the foreseeable future," it said, but a forecast of recurring profit of ¥40.0 billion ($0.5 billion) for the full year remains unchanged from the previous forecast.
Soaring Bunker Prices
NYK Line said throughout the period it saw "soaring bunker oil prices" which outweighed its cost-cutting measures of the slow steaming of vessels.
A "sluggish shipping market", continued market slump affecting its dry bulk carrier division, and deterioration of the Capesize market all impacted performance.
NYK Line's car carrier division "began to rebound", recovering from natural disasters in 2011, and the VLCC (very large crude carrier) tanker market was "relatively buoyant" thanks to a commissioning increase for longer routes to replace Iranian oil supplies subject to current Western sanctions.
The company noted that the pace of new build tankers entering service eased during the period, but little progress in removing older tankers from the market resulted in continued oversupply and the petroleum product tanker market remained sluggish.
Consolidated assets were ¥2,116.3 billion ($27 billion) at the end of June, a decrease of ¥5.9 billion ($75 million) from Q4 2011, with consolidated liabilities at ¥1,527.9 billion ($19.3 billion), a ¥28.2 billion ($3.5 billion) increase from year end 2011 reflecting bonds and long-term loans payable.
Looking ahead, the firm noted that bunker prices were currently declining and that could help improved profitability from the second quarter onward, adding it forecast a $650 per metric tonne (pmt) monthly average bunker price for the second, third, and fourth quarters with a full year average of $666.70 pmt.
NYK Line said the liner trade segment aims to be profitable over the full year and will be applying a peak season surcharge in summer as well as implementing other cost-reduction measures.
Its car carrier division is expected to show growth in shipment volumes compared with the previous fiscal year, with little growth expected the dry bulk carrier and tanker divisions.