K Line has become the latest of Japan’s big three publicly listed shipowners to forecast a massive increase in full-year profit.
The company said on Tuesday that it now expects to report a profit of ¥190bn ($1.7bn) for the fiscal year ended 31 March 2022.
The revised figure marks an increase of over $1.4bn on the original full-year profit forecast of ¥35bn made by K Line on 10 May.
K Line has also revised its forecast for the first half of the year, with net profit now expected to be ¥170bn, against an earlier forecast of ¥55bn.
K Line said Ocean Network Express (ONE) was expected to improve business forecast from the previously announced forecasts in May due to “robust cargo movement and spot freight rates”.
K Line has a 31% stake in ONE, the same as Mitsui OSK Lines. NYK Line is ONE's largest shareholder with a 38% stake.
On Monday, MOL said it was predicting a net profit of ¥170bn for the six months to 30 September, up from the previous forecast of ¥50bn made on 30 April.
The company said ONE is enjoying "considerably" better cargo movements and spot freight rates.
The changes come just a month after MOL, NYK Line and K Line told investors to expect “significantly lower profits” from ONE in the current financial year.
But since then, a fresh outbreak of Covid-19 at Yantian International Container Terminal in southern China has placed upward pressure on container freight rates.
Equity analysts have said the container sector remains very strong, with liner rates continuing to push higher, supporting charter rates and overall asset values.
On Monday, K Line was also boosted by news that the car carrier market, in which the three large Japanese shipowners dominate, had rebounded strongly from the lows seen at the peak of the Covid-19 outbreak.
Clarksons Research said that volumes are now just 5% below pre-Covid-19 volumes thanks to a combination of pent-up demand, economic stimulus measures and reopening economies.
