Mitsui OSK Lines has seen a near 20-fold increase in first-quarter net profit on the strength of the containership and bulkers markets.
The Japanese shipowner posted net income of ¥104.1bn ($950m) for the April to June 2021 period, figures released Friday show.
Revenue for the quarter rose 14.9% year-on-year to ¥288.8bn helped by a 35% and 26% increase in dry bulk and containership revenue, respectively.
MOL is now forecasting a full-year net profit of ¥335bn, up from its previous forecast of ¥2.1bn.
Ordinary profit at MOL’s containership arm increased over 15-fold in the first quarter to ¥90.6bn as cargo volumes “increased markedly” and spot freight rates remained “considerably higher” than the year-ago level.
MOL’s dry bulk business saw ordinary profit increase by a similar magnitude to ¥6.5bn as capesize charter rates rose to $40,000 in early May, the highest since 2013.
“While the charter rate entered the correction phase after that, it turned up again in early June on the back of the strong market for small and medium-sized bulkers and iron ore shipments from Australia,” MOL said.
“In the panamax bulker market during the first three months of the fiscal year, the charter rate rose from mid-April due to solid demand for the transportation of grain and coal bound for China and continued to rise subsequently, driven by grain shipments from the Atlantic Ocean region to the Far East.”
In the VLCC market, MOL said the charter rates were exposed to harsh market conditions "rarely seen in recent years" due to the continuation of coordinated output cuts by Opec+ and the prolonged sluggish oil demand due to Covid-19.
“The product tanker market also saw the challenging market conditions continue, due to periodic repairs at refineries and a fall in China’s exports and imports due to tax reforms for certain petroleum products, in addition demand for petroleum products remained weak due to the continued Covid-19 pandemic.”
“Under these market conditions, the tanker division as a whole suffered a year-on-year decline in profit, despite its efforts in cost reduction and the stable fulfilment of long-term contracts,” said MOL.
