Kawasaki Kisen Kaisha Ltd. , Japan's third-largest shiping firm, said on Thursday it will raise its annual earnings forecast next week, just months after cutting it by a tenth, because of an improving bulk carrier business and lower bunker fuel prices.As Reuters reports, Kawasaki Kisen -- which in August forecast a recurring profit of 57 billion yen (US$486.1 million) in the fiscal year ending March 2007 -- and larger rival Mitsui O.S.K. Lines Ltd. have struggled to cope with lofty fuel costs.But President Hiroyuki Maekawa told Rueters on Thursday that the firm's recurring profit for the year ending March 2007 would surpass expectations."We think it is going to be better than 57 billion yen ($486 million)," Maekawa said on the sidelines of a shipping forum in Shenzhen. He would not be more specific.The move might not come as a big surprise: the firm had been expected to post a 71 billion yen profit for the fiscal year ending March, according to the consensus forecast of nine analysts polled by Reuters Estimates.
Among the largest in the world, Japan's players are unique in that they are diversified shipping lines, compared with overseas rivals that specialise in container shipping.Of the three domestic shippers, Mitsui is the strongest in bulkships. Nippon Yusen KK , Japan's biggest ocean shipper, has placed more emphasis on diversifying through its businesses such as logistics and terminus operations, while Kawasaki Kisen has the highest ratio of container ships.
After several bumper years on a China-led boom, container shipping firms had faced a tough year, with freight rates hit after Danish shipping group A.P. Moeller-Maersk , the world's largest container shipping line, bought rival P&O Nedlloyd last year.Freight rates for dry bulk cargoes, such as iron ore, coal or grain, have since bounced back to levels not seen for nearly two years, despite earlier expectations that rates would soften this year as new builds hit the waters.Maekawa said his container business was recovering -- just not quite as fast as expected -- though he expected the container division to post losses this fiscal year.Two years ago, the company had recorded a container division profit of 50 billion yen."Stabilising container freight rates is the biggest task for us," the executive said.In August, Mitsui also lowered its full-year recurring profit estimate to 155 billion yen from 160 billion yen.That same month, Kawasaki Kisen said it expected an annual recurring profit of 57 billion yen, down 10 percent from an earlier estimate. It had posted a 58 percent plunge in the first quarter to 10.1 billion yen. ($1=117.26 Yen)