Nippon Yusen expects 60% profit drop in FY09
![](/img/en_news_image.jpg)
Nippon Yusen KK is expected to generate a group pretax profit of just 30-50 billion yen (US$305.64-509.4 million) for the year through March 2010, down more than 60 per cent from an estimate for fiscal 2008 due chiefly to lower shipping rates and weaker demand. For the year that ended March 31, the firm's pretax profit likely sank 31 per cent to about 136 billion yen. The flow of freight transported on container ships rapidly slowed after the start of the year, while rates for bulk vessels carrying iron ore fell.
The benchmark Baltic Dry Index now hovers at around 1,800, less than one-sixth the level seen last May.
Lower rates means a drop in the profitability of spot contracts. Demand for ships transporting automobiles is expected to fall 20-30 per cent in fiscal 2009.
The container ship segment will likely face continued difficulty. Nippon Yusen apparently managed to lift rates in April on routes from Asia to Europe, but is having a tougher time negotiating prices for North America-bound routes, for which contracts are up for renewal in May.
Even with cost-cutting efforts, this division may once again incur a pretax loss of 20-30 billion yen this fiscal year.
The benchmark Baltic Dry Index now hovers at around 1,800, less than one-sixth the level seen last May.
Lower rates means a drop in the profitability of spot contracts. Demand for ships transporting automobiles is expected to fall 20-30 per cent in fiscal 2009.
The container ship segment will likely face continued difficulty. Nippon Yusen apparently managed to lift rates in April on routes from Asia to Europe, but is having a tougher time negotiating prices for North America-bound routes, for which contracts are up for renewal in May.
Even with cost-cutting efforts, this division may once again incur a pretax loss of 20-30 billion yen this fiscal year.