Japan’s big three shipping companies have told investors to expect considerably lower profits from their joint-venture liner subsidiary Ocean Network Express (ONE) in the current financial year 2021.

ONE, which recently reported a $3.4bn profit in financial year 2020, said it has not yet finalised its profit forecast for 2021.

In its annual earnings report it said that the current uncertainties of the pandemic made it “extremely difficult” to make a forecast.

But its three Tokyo Stock Exchange-listed parent companies, NYK Line, Mitsui OSK Lines and K Line, have all told shareholders that they can expect considerably lower liner earnings from ONE.

NYK Line, in its 2021 profit forecast, said that it expected its recurring liner profits to tumble by ¥83.8bn ($772.6m) to ¥57bn. NYK said it is still unclear when the impact of the coronavirus pandemic on the boxship market would ease.

Temporary boom?

It suggested the cargo boom and port congestion that have contributed to the liner boom might be temporary.

“At the moment, transportation demand and port congestion continue but it is unclear as to when the supply-demand balance would normalise,” NYK said.

K Line is also forecasting a dramatic downturn in its liner earnings. K Line said in 2021 it expects ordinary income to fall by ¥70.8bn in its containership business to ¥33bn. K Line expects the containership market is set for a marked downturn in the second half of financial 2021.

MOL also said it expects ONE’s stable earnings to continue but to “soften through the year”.

MOL is expecting an ordinary profit in its liner business of ¥52bn in 2021, representing a fall of ¥65.1bn on financial 2020.

NYK Line is the largest shareholder in ONE with a 38% stake, while MOL and K Line each have a 31% stake.

Japan’s big three are all expecting to remain in profit in 2021. Despite a dip in liner profits, the companies are expecting improvements in their key dry bulk and car carrier markets to continue to support earnings.

K Line is forecasting a net profit of ¥35bn for the full year, NYK is expecting a net income of ¥140bn and MOL an ordinary income of ¥100m.