MOL bleeds as Japanese trio suffer in 2012

The largest of the trio, NYK Line, reported increases in both revenue and profit, breaking into positive territory with an operating profit of Y17.434bn (US$176m) on revenues up 4.9% in 2012 at Y1,897bn. This contrasted with the Y24.12bn loss made last year.

NYK’s container business continued to be hit by the crisis in that sector, with a small Y10bn profit, which was an improvement on the Y48bn loss in 2012. Meanwhile, revenue was up 5.5%. The air freight business saw a 9% fall in revenue and a substantial Y4.8bn loss. The Yusen Logistics business also saw revenue fall substantially, down 5.4%, however it remained in profit; although with the ‘recurring profit’ down by around a half at Y4.7bn.

Interestingly, the ‘bulk shipping’ division did well with an 8.9% increase in revenue and a big jump in both operating and recurring profits. This appears to be driven by a combination of a good performance in the car-carrier business as well as the provision of oil drilling vessels. Other than that, the company said the bulk and tanker markets were characterised by weak demand, over-supply and poor rates.

MOL experienced a worse 2012 as its revenue fell 5.2%, whilst in terms of operating profit and net income the company saw a loss of Y15.7bn and Y178bn (US$1.7bn) respectively; the latter driven by enormous write-downs associated with restructuring the company. Again, this was driven by weak markets in both containers and bulk shipping. However, as with NYK, profits from car-carriers were one of the few areas of hope.

K Line saw its revenue jump by 16%. However, despite returning to a profitable performance, margins remain very thin, with net income of Y10.7bn on revenue of Y1,134.8bn. The dismal state of the container and bulk shipping markets was once again to blame and similarly the car-carrier business offset the struggles and provided profitability.

It is worth noting that both MOL and K Line saw growth not in the Japan-Europe trade, but in newer routes such as intra-Asia.

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