K Line has become the second Japanese liner operator to upgrade its profits on the back of a resurgent container shipping market.
The Japanese company now expects a profit of ¥210bn ($1.375bn) for the fiscal year ending March 2025.
That is up 75% from the ¥90bn forecast on 7 May.
The hike is largely thanks to its shareholding in Ocean Network Express, the world’s sixth-largest liner operator.
The K Line affiliate “has seen market conditions exceed our previous expectations due to robust cargo demand and the utilisation of the Cape of Good Hope route caused by the Red Sea situation”, the company said.
In a note detailing the updated consolidated financial forecast, it added the revision was “mainly due to stable product logistics demand and market trend”.
K Line expects a profit for the six months to the end of September 2024 of ¥162bn ($1.06bn). That is more than double the initial forecast of ¥77m issued 10 weeks ago.
Operating revenue for the same period is forecast to rise 7.9% to ¥533bn.
Lucrative shareholding
K Line is one of three Japanese partners in ONE, along with compatriots NYK Line and Mitsui OSK Lines.
Earlier this week, NYK significantly revised its profit forecasts for the financial year due to the impact of the prolonged Red Sea crisis on vessel earnings.
NYK now expects net profit for the second quarter to be 85.2% higher than its previous profit forecast in early May.
The company now projects a figure of ¥250bn, significantly higher than the ¥135bn forecasted during its full-year results announcement.
It attributed the revision to the Red Sea situation.
This had necessitated the use of the Cape of Good Hope route, and led container ship supply-demand tightness and freight rate conditions to exceed expectations, NYK said.
MOL — the third Japanese shipping to have taken a shareholding in ONE when the company was launched in 2017 — has yet to issue a profit upgrade.
