Nippon Yusen profit declines; Mitsui OSK gains
Shares of Nippon Yusen K.K, Japan's largest shipping line, tumbled the most in more than five years after it cut its full-year profit forecast amid greater than expected losses at its Nippon Cargo Airlines Co. unit.
Nippon Yusen more than tripled its current loss forecast for Nippon Cargo to 8.8 billion yen ($72.3 million) for the six months to March 31. The shipping line cut its net income forecast for the year ending March 31 to 65.5 billion yen, from 68 billion yen.
Things are looking tough,'' said Hajime Hitotsuyanagi, an analyst at Daiwa Institute of Research. I expected better results. It's going to take time to turn around Nippon Cargo.''
Nippon Cargo flew less freight on its North American and Asian routes in the quarter than forecast, as maintenance of its ageing planes reduced capacity and added to costs. Profits from Nippon Yusen's main business are also faltering as rivals have introduced more ships, keeping container rates low.
Nippon Yusen and other shipping lines increased their capacity to move containers 14 percent in 2006, the fastest pace in six years, according to data from Containerisation International.
Container rates have bottomed out and are picking up, but not enough to make a profit on them yet,'' said Takahiko Kishi, an analyst at Mizuho Investors Securities Co. in Tokyo.
Shares of Nippon Yusen fell as much as 9.1 percent to 891 yen, the biggest intraday drop since Sept. 17, 2001, and traded at 899 yen as of 2:30 p.m. in Tokyo.
Net income at Nippon Yusen fell 31 percent to 19.1 billion yen in the three months ended Dec. 31, from 27.7 billion yen a year earlier, the Tokyo-based company said in a statement today. Sales at Nippon Yusen rose 4.6 percent to 548.6 billion yen, from 524.2 billion yen a year earlier.
The market for tankers for crude oil and petroleum products has been weak in the fourth quarter, the shipping company said.
Nippon Yusen previously forecast a 2.3 billion yen loss from Nippon Cargo in the fiscal second half. Nippon Yusen said it will take measures to improve the unit's earnings by March. The unit lost 3.5 billion yen in the three months to Dec. 31.
Pilot training and the construction of a new hangar at Tokyo's Narita International Airport have also increased costs at Nippon Cargo, the parent company said in November.
Mitsui O.S.K. Lines Ltd., Japan's second-largest shipping company, boosted net income by 41 percent in the three months ended Dec. 31, to 39.8 billion yen from 28.2 billion yen a year earlier, the Tokyo-based company said in a statement today. Sales increased 6 percent to 402.2 billion yen, from 379.7 billion yen.
Mitsui O.S.K. cited higher demand for the shipment of dry- bulk cargo and higher rates on routes to South America and Africa. It raised its net income forecast for the year ending March 31, to 118 billion yen, from 112 billion yen.
Shares of Mitsui O.S.K. fell as much as 4.9 percent to 1,208 yen and traded at 1,215 yen as of 2:30 p.m. in Tokyo.
Kawasaki Kisen Kaisha Ltd.'s net income fell 4.1 percent to 15 billion yen in the three months ended Dec. 31, from 15.7 billion yen a year earlier, the Tokyo-based shipping company said in a statement today. Sales rose 21 percent to 282.5 billion yen, from 234.2 billion yen a year earlier.
Kawasaki Kisen, also known as K-Line, raised its net income forecast for the year ending March 31 to 51.5 billion yen, from 51 billion yen.
Shares of K-Line fell as much 5.5 percent to 1,030 yen and traded at 1,041 yen as of 2:30 p.m. in Tokyo.
Nippon Yusen more than tripled its current loss forecast for Nippon Cargo to 8.8 billion yen ($72.3 million) for the six months to March 31. The shipping line cut its net income forecast for the year ending March 31 to 65.5 billion yen, from 68 billion yen.
Things are looking tough,'' said Hajime Hitotsuyanagi, an analyst at Daiwa Institute of Research. I expected better results. It's going to take time to turn around Nippon Cargo.''
Nippon Cargo flew less freight on its North American and Asian routes in the quarter than forecast, as maintenance of its ageing planes reduced capacity and added to costs. Profits from Nippon Yusen's main business are also faltering as rivals have introduced more ships, keeping container rates low.
Nippon Yusen and other shipping lines increased their capacity to move containers 14 percent in 2006, the fastest pace in six years, according to data from Containerisation International.
Container rates have bottomed out and are picking up, but not enough to make a profit on them yet,'' said Takahiko Kishi, an analyst at Mizuho Investors Securities Co. in Tokyo.
Shares of Nippon Yusen fell as much as 9.1 percent to 891 yen, the biggest intraday drop since Sept. 17, 2001, and traded at 899 yen as of 2:30 p.m. in Tokyo.
Net income at Nippon Yusen fell 31 percent to 19.1 billion yen in the three months ended Dec. 31, from 27.7 billion yen a year earlier, the Tokyo-based company said in a statement today. Sales at Nippon Yusen rose 4.6 percent to 548.6 billion yen, from 524.2 billion yen a year earlier.
The market for tankers for crude oil and petroleum products has been weak in the fourth quarter, the shipping company said.
Nippon Yusen previously forecast a 2.3 billion yen loss from Nippon Cargo in the fiscal second half. Nippon Yusen said it will take measures to improve the unit's earnings by March. The unit lost 3.5 billion yen in the three months to Dec. 31.
Pilot training and the construction of a new hangar at Tokyo's Narita International Airport have also increased costs at Nippon Cargo, the parent company said in November.
Mitsui O.S.K. Lines Ltd., Japan's second-largest shipping company, boosted net income by 41 percent in the three months ended Dec. 31, to 39.8 billion yen from 28.2 billion yen a year earlier, the Tokyo-based company said in a statement today. Sales increased 6 percent to 402.2 billion yen, from 379.7 billion yen.
Mitsui O.S.K. cited higher demand for the shipment of dry- bulk cargo and higher rates on routes to South America and Africa. It raised its net income forecast for the year ending March 31, to 118 billion yen, from 112 billion yen.
Shares of Mitsui O.S.K. fell as much as 4.9 percent to 1,208 yen and traded at 1,215 yen as of 2:30 p.m. in Tokyo.
Kawasaki Kisen Kaisha Ltd.'s net income fell 4.1 percent to 15 billion yen in the three months ended Dec. 31, from 15.7 billion yen a year earlier, the Tokyo-based shipping company said in a statement today. Sales rose 21 percent to 282.5 billion yen, from 234.2 billion yen a year earlier.
Kawasaki Kisen, also known as K-Line, raised its net income forecast for the year ending March 31 to 51.5 billion yen, from 51 billion yen.
Shares of K-Line fell as much 5.5 percent to 1,030 yen and traded at 1,041 yen as of 2:30 p.m. in Tokyo.