Mitsui OSK Lines said it plans to retain some of the record profits from the last two years in the face of the impending economic slowdown and the impact it is likely to have on future results.
“In the last two years, we have achieved fantastic financial results against the backdrop of a soaring shipping market,” chief executive Takeshi Hashimoto said in his New Year’s message.
“But due to the global inflation that has been rising since last year, high interest rates, and the resulting economic downturn, we expect our profits for the next fiscal year to be lower than in FY2021 and FY2022.
“This year, we may see the impact of inflationary measures in the US and Europe, and a significant but temporary downturn in the economy.
“We intend for this year to be one in which we effectively use the capital we have accumulated over the past two years to prepare for deteriorating financial results and to invest for our future growth,” he added.
However, Hashimoto said he expects a return to a moderate expansionary trend in the “not-too-distant future”, as the Chinese economy normalises and the pace of US interest rate hikes slows.
Hashimoto said he expects MOL to achieve record high profits for the current fiscal year, benefiting from strong demand for ocean-going shipping and the accompanying surge in market rates.
However, he warned that freight rates have already begun to decline in some segments, especially the container segment, as logistics disruption comes to an end.
“The shipping market is always volatile, and we expect a reversal in market conditions,” he said.
“The global economy is in an overall downtrend, and we have also had to prepare for future market downturns.”
Hashimoto also said that MOL would continue its energy transport business, mainly LNG, from Russia, “as long as we can”, considering the strategic importance of energy supply under current circumstances.
In July 2022, Hashimoto said Japan had no option but to keep importing Russian LNG, due to the lack of viable alternatives for the country.
“Some companies decided to withdraw from Russia-related business, but our group will continue to offer stable transport services, placing the highest priority on securing the safety of crewmembers, cargo, and vessels,” he said.
“Of course, at the same time I pray that the situation will be brought to an end as soon as possible and that the people of Ukraine will return to safety and peace,” he added.
MOL has one jointly-operated LNG carrier – the 147,200-cbm Grand Mereya (built 2008) committed to the Russian Sakhalin-2 LNG export project.
In October 2022 MOL signed a fresh long-term charter of the ship with the new Russian operator of the Sakhalin-2 LNG project.
