Kawasaki Kisen Kaisha Ltd., Nippon Yusen K.K., Mitsui O.S.K. Lines Ltd., Japan’s biggest shippers, forecast profit this fiscal year may plunge as much as 80 percent as recessions in the U.S. and Europe damp trade.
K-Line, as Kawasaki Kisen Kaisha is known, forecast the largest decline, predicting net income of 6.5 billion yen ($67 million) in the year ending March 31. Mitsui O.S.K forecasts a drop of 69 percent and Nippon Yusen expects profit to drop 68 percent in the period.
The global recession has slashed demand for furniture, building materials and consumer electronics shipped by container from Asia. A slump in China’s demand for iron-ore and coal pushed the Baltic index, a measure of commodity-shipping rates, to a record low at the end of last year.
“The worst period has passed, but we will still have a bad year ahead of us,” said Masayuki Kubota, who oversees the equivalent of $1.9 billion in assets in Tokyo at Daiwa SB Investments Ltd. “Next fiscal year we will have a real recovery led by China and the U.S.”
China’s economy expanded at the slowest pace in almost 10 years last quarter amid factory closures. The world’s biggest steelmaker and buyer of iron ore grew at 6.1 percent in the January to March period, compared with a 6.8 percent gain in the previous three months.
K-Line
K-Line sales this fiscal year may fall 24 percent to 950 billion yen, the Tokyo-based company said. The net income forecast compares with a profit of 32.4 billion yen last year, a 61 percent decline on the year earlier. It lost 8.2 billion yen in the fourth quarter.
Operating profit for this year may fall 78 percent to 16 billion yen, it said today. K-Line fell 4.5 percent to 386 yen at the close of trading in Tokyo.
Nippon Yusen, Japan’s largest shipping line by sales, predicts net income of 18 billion yen for the year ending March 31, compared with a profit of 56 billion yen last fiscal year, the Tokyo-based company said. It forecasts sales will be 1.88 trillion yen, compared with 2.43 trillion yen last business year.
First Quarterly Loss
The shipping line posted a loss of 54.1 billion yen last quarter, its first quarterly loss since at least 2003.
To cut capacity and shore up shipping rates, Nippon Yusen is laying up about 20 container ships as demand slides. About 13 percent of the global fleet, or 587 vessels, were anchored on March 22, according to data complied by Bloomberg.
Nippon Yusen fell 3.9 percent to 423 yen in Tokyo trading.
Mitsui O.S.K., operator of Japan’s largest fleet of iron- ore ships, forecast net income will sink to 40 billion yen this fiscal year from 127 billion yen. It also predicts sales will fall 25 percent to 1.4 trillion yen from last year, it said. The country’s shippers are being hurt by a drop in demand for the transportation of steel-making ingredients in China.
The shipping line also reported its first quarterly loss since at least 2003 as it had a net loss of 10.7 billion yen last quarter.
The Baltic index, a measure of commodity-shipping rates, tumbled 79 percent last quarter from a year ago, its biggest drop on record.
The index averaged 1,562 points in the three months ended March 31, compared with 7,343 points in the same three-month period a year earlier.
Mitsui O.S.K. fell 5.8 percent to 588 yen in Tokyo trading.
K-Line, as Kawasaki Kisen Kaisha is known, forecast the largest decline, predicting net income of 6.5 billion yen ($67 million) in the year ending March 31. Mitsui O.S.K forecasts a drop of 69 percent and Nippon Yusen expects profit to drop 68 percent in the period.
The global recession has slashed demand for furniture, building materials and consumer electronics shipped by container from Asia. A slump in China’s demand for iron-ore and coal pushed the Baltic index, a measure of commodity-shipping rates, to a record low at the end of last year.
“The worst period has passed, but we will still have a bad year ahead of us,” said Masayuki Kubota, who oversees the equivalent of $1.9 billion in assets in Tokyo at Daiwa SB Investments Ltd. “Next fiscal year we will have a real recovery led by China and the U.S.”
China’s economy expanded at the slowest pace in almost 10 years last quarter amid factory closures. The world’s biggest steelmaker and buyer of iron ore grew at 6.1 percent in the January to March period, compared with a 6.8 percent gain in the previous three months.
K-Line
K-Line sales this fiscal year may fall 24 percent to 950 billion yen, the Tokyo-based company said. The net income forecast compares with a profit of 32.4 billion yen last year, a 61 percent decline on the year earlier. It lost 8.2 billion yen in the fourth quarter.
Operating profit for this year may fall 78 percent to 16 billion yen, it said today. K-Line fell 4.5 percent to 386 yen at the close of trading in Tokyo.
Nippon Yusen, Japan’s largest shipping line by sales, predicts net income of 18 billion yen for the year ending March 31, compared with a profit of 56 billion yen last fiscal year, the Tokyo-based company said. It forecasts sales will be 1.88 trillion yen, compared with 2.43 trillion yen last business year.
First Quarterly Loss
The shipping line posted a loss of 54.1 billion yen last quarter, its first quarterly loss since at least 2003.
To cut capacity and shore up shipping rates, Nippon Yusen is laying up about 20 container ships as demand slides. About 13 percent of the global fleet, or 587 vessels, were anchored on March 22, according to data complied by Bloomberg.
Nippon Yusen fell 3.9 percent to 423 yen in Tokyo trading.
Mitsui O.S.K., operator of Japan’s largest fleet of iron- ore ships, forecast net income will sink to 40 billion yen this fiscal year from 127 billion yen. It also predicts sales will fall 25 percent to 1.4 trillion yen from last year, it said. The country’s shippers are being hurt by a drop in demand for the transportation of steel-making ingredients in China.
The shipping line also reported its first quarterly loss since at least 2003 as it had a net loss of 10.7 billion yen last quarter.
The Baltic index, a measure of commodity-shipping rates, tumbled 79 percent last quarter from a year ago, its biggest drop on record.
The index averaged 1,562 points in the three months ended March 31, compared with 7,343 points in the same three-month period a year earlier.
Mitsui O.S.K. fell 5.8 percent to 588 yen in Tokyo trading.