Japanese shipping major K Line said it would book an impairment loss of ¥5.26bn ($48.9m) for lower valuations of investment securities, dampening the prospects of returning to profitability in the fiscal year.
In a press release, the Tokyo-listed company said the market value of the securities classified as “available-for-sale” showed no prospects for recovery.
No further information was given on the impairment to be recorded for the period between January and March.
With the coronavirus pandemic wiping out growth prospects, global stock markets have fallen sharply this year.
In addition, K Line said it now expects the net results for the financial year ended on 31 March to be weaker than the previous forecast of an ¥11bn profit.
The company recorded a profit of ¥25.2bn for the nine months through to the end of December 2019, versus a loss of ¥31bn during the same period of the previous year.
The results reflected an improved performance in the product logistics business, in which K Line combines its car carrier and containership operations.
However, K Line has held off from announcing any yearly dividend payout, citing market uncertainty.
In the previous fiscal year, K Line paid no dividend after posting an annual loss of ¥111bn.
The company, which owns one of the world’s largest diverse fleet in the word, has been adjusting its business model in recent years amid falling Japanese imports of iron ore.
K Line has shrunk its fleet of bulkers by 34 ships to 194 vessels over the past five years while growing its LNG fleet by eight ships to 49 vessels.
It has expanded on its offshore supply vessels business — K Line Offshore — to cover semi-submersibles, drillships and aimed to enter the offshore floating storage and regasification unit sector.
The company is due to announce its annual results on 11 May.
