Nippon Yusen Kaisha (NYK) was the only of Japan’s “big three” shipping companies to report an increase in first quarter profits.
NYK reported a net profit of JPY10.2bn ($99.83m) for the first quarter ended 30 June 2014 compared JPY8.57bn a year earlier. Revenues were also up at JPY582.4bn for the first quarter compared to JPY528.5bn in the same period in the previous year.
Although profitability showed a slight improvement NYK was negative about the business environment for shipping. “The environment surrounding the shipping industry remained severe due to the continued slump in freight rates caused by an excess supply of vessels. In response, the NYK Group strove to further reduce fleet and operational expenses by rationalising the fleet assignments and reducing fuel costs,” NYK said.
At a segment all of NYK’s shipping business sectors were profitable with bulk shipping, comprising both wet and dry bulk the largest contributor with a JPY11.9bn profit in the first quarter.
Looking ahead NYK said: “Regarding the forecast of this fiscal year, although the business environment surrounding the container shipping business is expected to remain severe, we will strive to increase the freight rate by catching the seasonal increase in cargo volume which is expected over the summer.
“In the dry bulk business, although shipping market is expected to improve from summer, we see continued downturn by oversupply for some types of bulkers, and we revised the assumption of shipping markets accordingly.”
The company is forecasting a net profit of JPY35bn for the year ended 31 March 2015.
