NYK loses US$187 million in fiscal 2010

TOKYO's Nippon Yusen Kabushiki Kaisha, or NYK Line and its subsidiaries suffered an annual loss of JPY17.4 billion (US$187 million) in fiscal 2010 after having earned a JPY56.1 billion profit the year before.

Revenues in fiscal 2010 came in at JPY1.6 trillion (US$18.2 billion), a drop of 33 per cent from the previous year's sales of JPY2.4 trillion.

"Revenue declined significantly in the liner trade and bulk shipping on the effects of weak container volumes and declines in freight rates, a weak tanker market, and a delayed recovery in automotive transport movements, especially during the first half," said NYK.

"Given the large decline in revenues, the ratio of operating income to revenues fell to -1.1 per cent from six per cent the previous fiscal year, a decrease of seven per cent," said NYK's annual report.

"This led to a JPY171.3 billion decline in recurring profit. Net income was down JPY73.6 billion despite the recording of extraordinary profit from the sales of investment securities and assets," the company said.

Of its liner trade, the NYK said: "Against the backdrop of a recovery trend in container transport volume from the third quarter, cargo volumes on many routes, especially North American and European routes, were higher year on year for the fourth quarter and the second half, but given the first half's weak transport volume, cargo volume for the full year was lower than in the previous year.

"An improved supply - demand environment also led to a significant rebound in freight rates on European routes and Latin American routes, but average freight rates were lower on a full-year basis and segment revenues declined as a result," said the report.

NYK also said bunker prices were lower than in the previous year, which results in big cost savings, but the container trade still failed to achieve the previous fiscal year's level.

Even though the shipping environment improved, said the company, recovery did not materialise for NYK, which suffered the "most difficult year in its history".

Containers account for 20.7 per cent of NYK's business with bulk shipping accounting for 40.1 per cent, logistics accounts for 18.7 per cent, terminals and transport for six per cent; cruise business, 1.9 per cent; air cargo, 3.4 per cent; real estate, 0.7 per cent with sundry businesses accounting for the remaining 8.5 per cent.
(Source:www.schednet.com)