NYK Line investors are set to benefit from the red-hot containership market after the company said it would boost dividend payouts to shareholders.
The Japanese giant said full-year dividends for the FY2025 year would now be increased to ¥260 ($1.82) per share versus the ¥140 per share paid last year.
“The company regards the stable return of profits to shareholders as one of the most important management priorities and determines profit distribution based on a targeted consolidated dividend payout ratio of 30% with the minimum annual dividend of ¥100 per share,” NYK Line said Monday.
“In addition, the company will make decisions on the implementation of flexible additional shareholder returns, including the acquisition of own stock, after considering investment opportunities and the business environment.”
NYK Line announced earlier this year that it plans to spend up to ¥100bn to buy back its own shares and has already acquired more than 8m shares as of the end of July 2024.
News of the increased dividend came as NYK Line reported a 50% year-on-year increase in the first quarter net profit to ¥110.2bn.
NYK Line said recurring profit at its liner operation was up 70% year-on-year to ¥53.7bn.
“Market levels were significantly higher than in the same period last year due to tight supply-demand conditions caused by the situation in the Red Sea and rising cargo demand,” NYK Line said.
“At Ocean Network Express, the profit level was also significantly higher than in the same period last year due to higher short term freight unit prices compared to the same period last year.”
NYK Line’s car carrier business saw its net profit increase 28% to ¥37.8bn despite ongoing port congestion and route changes caused by the conflict in the Middle East.
“We worked to optimize our vessel deployment plans and vessel operations to meet firm demand for finished car transport,” the shipowner said.
“As a result, the number of vehicles transported remained strong year on year and was affected by the weak yen and other factors.”
In contrast, NYK Line’s dry bulk business saw only a slight increase in recurring profit, which was up 8.5% year-on-year to ¥14bn.
NYK Line said capesize market levels increased year on year, supported by strong shipments of iron ore cargoes from Brazil, which was less affected by the rainy season.
“Market levels for panamax sizes and smaller increased year on year as the supply-and-demand conditions tightened due to the coincidence of peak soybean shipments from Brazil and the active loading of coal inventories in China and India for the summer season,” it added.
Looking ahead, NYK Line expects its full-year recurring profit to come in significantly higher than its previous forecast made in early May 2024.
The company expects to report full-year net income of ¥410bn, up from original forecasts of ¥250bn with most of that increase coming from the liner segment.
