NYK Line reported a leap in third-quarter profit across its ocean shipping businesses that overshadowed an extraordinary loss in its air freight division.
The Japanese shipping giant booked a profit of JPY 7.6bn ($69.8m) for the third quarter of the fiscal year, which is an improvement from the JPY 1bn in profit in the same period a year earlier.
That took its profit for the first nine months to JPY 18.7bn, turning around around a JPY 8.7bn loss from the same period of the prior fiscal year.
However, the company saw revenue for the year-to-date decline by 9.5% to JPY 1.25 trillion.
The third quarter boost in the bottom line came as the continued problems in NYK Line's air cargo transportation business prompted the company to take an extraordinary loss of about JPY 15.7bn in the third quarter.
The Tokyo-listed outfit, which operates a diversified fleet, said it took the decision after a review of the “future recoverability” of the non-current assets including airframes, spare engines and parts.
NYK’s liner activities booked a profit of JPY 13.4bn for the April to December period, reversing a year-ago loss of JPY 24.7bn. This despite revenue sliding almost 30% to JPY 155bn.
The Tokyo company attributed the “significant increase” in profit due to the previous year’s liner business termination costs and the upward forecast revisions by Ocean Network Express (ONE).
Liner revenue dips
That came despite a decline in container shipping revenue.
ONE, the container liner alliance made up of NYK Line and its main Japanese peers, "maintained steady overall liftings and utilisation, and the liftings particularly increased on the major North America and Europe trades, as well as the intra-Asia trade", NYK said.
There are many ways you can engage with TradeWinds on social media.
· Click here to follow us on Twitter
· Like us on Facebook to get our updates by clicking here
"However, in the third quarter, liftings stagnated as a result of seasonally slower demand and the impact of the trade problem between the US and China."
Profit at the outfit's bulk shipping arm increased 31% year-on-year to JPY 34.8bn, despite revenue easing by 3.5% to JPY 611bn.
NYK highlight a “strong performance” by its energy and car carrier arms as well as a recovery in its dry bulk activities for the improvement.
"In the dry bulk division, although more new ships were commissioned than the number of ships scrapped, the increased dry dockings primarily of capesize bulk carriers in preparation for the environmental regulations which have been in effect from January 2020 resulted in a tighter supply," the company said.
