Japan’s K Line has announced a sharp fall in quarterly profits as its main markets in dry bulk, energy and container ships all declined.
For the first quarter to the end of June K Line’s sales reached ¥222.2bn ($1.5bn), down 2.8% on the same period in the previous year.
Net profit fell a whopping 85.5% to ¥38.5bn.
Profits fell across the board in the company's main shipping segments.
K Line’s dry bulk profits slumped by 89.7%, compared to the same quarter in the previous financial year, to ¥1.5bn.
“In the Capesize sector, market rates initially recovered due to the robust transportation demand against the backdrop of the expectations for economic recovery in China.
“However, market rates weakened as a result of delay in recovery of actual demand in China, which loosened the vessel supply-demand balance along with the easing of port congestion,” K Line said explaining the decline in dry bulk rates.
Energy transportation profits fell by 56.1% to ¥2.4bn.
Profits from its joint venture liner subsidiary Ocean Network Express (ONE) were also hit hard by the downturn in the container ship market.
“The business performance of "ONE", the affiliate company accounted with the equity method, weakened as a result of decrease in short-term freight market rates due to sluggish transportation demand, in addition to the normalisation of supply chain disruptions,” said K Line.
TradeWinds earlier reported ONE's net profit sank to $513m in the period from April to June, down 91% from $4.98bn in the same period last year.
ONE’s performance is included in K Line’s product logistics segment which showed an 81.5% fall in profits to ¥45.9bn.
