Japanese shipping giants MOL and "K" Line financial results for the nine months ended December 31 show profits falling for both year-on-year because of low freight rates and high fuel prices.
MOL reported that the group's consolidated net income fell 2.7 per cent to JPY87.5 billion (US$721.56 million) during the nine-month period from April 1 2006 while rival "K" Line posted a profit of JPY35.58 billion, down by JPY14.97 billion year on year.
For MOL, revenue amounted to JPY1.161.7 billion, up 14.3 per cent. Operating income declined 12.5 per cent to JPY120.3 billion and ordinary income shed 8.6 per cent, amounting to JPY128.6 billion.
Its container shipping division posted an operating loss of JPY2.3 billion on the back of 15.7 per cent higher revenue of JPY426.1 billion. The logistics division faired better despite a 10.1 per cent revenue slide to JPY43.4 billion and operating income was up 11.3 per cent to JPY1.0 billion.
MOL said its container shipping trade routes remained "firm", with handling volumes increasing. But bunker prices, terminal handling charges and inland rail freight expenses in the US hit profits and freight rates, which dropped in late 2005, did not fully recover.
Looking ahead, MOL sees container shipping growth, and a tightening of vessel space, forecasting higher freight rates, particularly on South America and Africa routes.
"K" Line operating revenue was again higher, in this case by JPY111.55 billion to rise to JPY800.52 billion, while operating income shed JPY29.53 billion at JPY39.72 billion.
As a result, "K" Line is forecasting a net income of JPY51.5 billion, operating revenue of JPY1,080 billion, operating income of JPY61.0 billion, and ordinary income of JPY63.0 billion for the full year.
MOL reported that the group's consolidated net income fell 2.7 per cent to JPY87.5 billion (US$721.56 million) during the nine-month period from April 1 2006 while rival "K" Line posted a profit of JPY35.58 billion, down by JPY14.97 billion year on year.
For MOL, revenue amounted to JPY1.161.7 billion, up 14.3 per cent. Operating income declined 12.5 per cent to JPY120.3 billion and ordinary income shed 8.6 per cent, amounting to JPY128.6 billion.
Its container shipping division posted an operating loss of JPY2.3 billion on the back of 15.7 per cent higher revenue of JPY426.1 billion. The logistics division faired better despite a 10.1 per cent revenue slide to JPY43.4 billion and operating income was up 11.3 per cent to JPY1.0 billion.
MOL said its container shipping trade routes remained "firm", with handling volumes increasing. But bunker prices, terminal handling charges and inland rail freight expenses in the US hit profits and freight rates, which dropped in late 2005, did not fully recover.
Looking ahead, MOL sees container shipping growth, and a tightening of vessel space, forecasting higher freight rates, particularly on South America and Africa routes.
"K" Line operating revenue was again higher, in this case by JPY111.55 billion to rise to JPY800.52 billion, while operating income shed JPY29.53 billion at JPY39.72 billion.
As a result, "K" Line is forecasting a net income of JPY51.5 billion, operating revenue of JPY1,080 billion, operating income of JPY61.0 billion, and ordinary income of JPY63.0 billion for the full year.