Nippon Yusen KK, Japan's largest shipping line by sales, forecasts pretax profit will increase by about 13 per cent next fiscal year as it earns more from container shipments and narrows losses at its air-cargo business.
Earnings at its dry-bulk unit will be little changed in the year starting April 1, Makoto Igarashi, head of the corporate communications department at Nippon Yusen, said in an interview. The pretax profit contribution from other divisions will climb by about 25 billion yen (S$327 million), he said. The company forecasts pretax profit of 200 billion yen this fiscal year.
The shipping line predicts pretax profit at its container unit will more than double as it raises prices to carry boxes to North America. Tokyo-based Nippon Yusen's profit surged to a record in the last quarter as China's economic growth spurred demand for ships to carry raw materials such as iron ore.
'The container business looks promising,' said Yoshihisa Miyamoto, an analyst in Tokyo at Okasan Securities Co. 'Nippon Yusen is managing to reel in losses at its air-cargo business.'
Nippon Yusen's container-shipping business will earn about 20 billion yen in pretax income, compared with 9.5 billion yen this year, Mr Igarashi said.
Container shipping was the company's second-largest business last year, accounting for 26 per cent of Nippon Yusen's 2.16 trillion yen in sales. Shipments of bulk commodities, cars, oil and gas accounted for 36 per cent of sales.
'Early indications are that we will be able to push through increases in rates on our North American routes in negotiations this year,' Mr Igarashi said last Friday. 'That will help boost profit overall.'
Nippon Cargo Airlines Co, the shipping company's air transport unit, will narrow its pretax loss next fiscal year to 16.5 billion yen from a projected 26.5 billion yen this fiscal year, as the addition of new, more fuel-efficient aircraft and the retirement of older planes help cut costs, Mr Igarashi said.
The unit is speeding up the retirement of Boeing 747-200Fs by one year to remove all planes from service by the end of next month, Nippon Yusen said on Jan 29. The unit will have 10 Boeing 747-400Fs in place by the end of March 2009, reducing fuel costs.
Nippon Yusen will also probably boost pretax profits at its ports and distribution divisions by about 5 billion yen in total, Mr Igarashi said. The units are forecast to earn 8.5 billion yen and 19 billion yen this fiscal year, said the company.
The shipping line will expand its fleet by at least 35 per cent to over 1,000 vessels by the end of March 2014, Mr Igarashi said. Nippon Yusen had 742 ships at the end of March and will increase that to 932 vessels by the end of March 2011, according to its medium- term business plan.
Rival Mitsui OSK Lines Ltd, operator of Japan's largest merchant fleet, will increase its fleet to 1,000 ships by the end of March 2010 and to 1,200 by the end of March 2013, according to its mid-term business plan. It had 803 ships at the end of last March.
Earnings at its dry-bulk unit will be little changed in the year starting April 1, Makoto Igarashi, head of the corporate communications department at Nippon Yusen, said in an interview. The pretax profit contribution from other divisions will climb by about 25 billion yen (S$327 million), he said. The company forecasts pretax profit of 200 billion yen this fiscal year.
The shipping line predicts pretax profit at its container unit will more than double as it raises prices to carry boxes to North America. Tokyo-based Nippon Yusen's profit surged to a record in the last quarter as China's economic growth spurred demand for ships to carry raw materials such as iron ore.
'The container business looks promising,' said Yoshihisa Miyamoto, an analyst in Tokyo at Okasan Securities Co. 'Nippon Yusen is managing to reel in losses at its air-cargo business.'
Nippon Yusen's container-shipping business will earn about 20 billion yen in pretax income, compared with 9.5 billion yen this year, Mr Igarashi said.
Container shipping was the company's second-largest business last year, accounting for 26 per cent of Nippon Yusen's 2.16 trillion yen in sales. Shipments of bulk commodities, cars, oil and gas accounted for 36 per cent of sales.
'Early indications are that we will be able to push through increases in rates on our North American routes in negotiations this year,' Mr Igarashi said last Friday. 'That will help boost profit overall.'
Nippon Cargo Airlines Co, the shipping company's air transport unit, will narrow its pretax loss next fiscal year to 16.5 billion yen from a projected 26.5 billion yen this fiscal year, as the addition of new, more fuel-efficient aircraft and the retirement of older planes help cut costs, Mr Igarashi said.
The unit is speeding up the retirement of Boeing 747-200Fs by one year to remove all planes from service by the end of next month, Nippon Yusen said on Jan 29. The unit will have 10 Boeing 747-400Fs in place by the end of March 2009, reducing fuel costs.
Nippon Yusen will also probably boost pretax profits at its ports and distribution divisions by about 5 billion yen in total, Mr Igarashi said. The units are forecast to earn 8.5 billion yen and 19 billion yen this fiscal year, said the company.
The shipping line will expand its fleet by at least 35 per cent to over 1,000 vessels by the end of March 2014, Mr Igarashi said. Nippon Yusen had 742 ships at the end of March and will increase that to 932 vessels by the end of March 2011, according to its medium- term business plan.
Rival Mitsui OSK Lines Ltd, operator of Japan's largest merchant fleet, will increase its fleet to 1,000 ships by the end of March 2010 and to 1,200 by the end of March 2013, according to its mid-term business plan. It had 803 ships at the end of last March.