Japan shippers mark bumper year but outlook soft
April 25th, 2008 | by admin |TOKYO, April 25 (Reuters) – Japanese shipping firms NipponYusen KK (9101.T: Quote, Profile, Research) and Mitsui O.S.K Lines Ltd (9104.T: Quote, Profile, Research) reportedbumper profits on Friday but gave soft forecasts for profits inthe year ahead as higher costs eat into gains from robust demandand higher freight rates.
The nation’s biggest marine transport firms, which alsoinclude Kawasaki Kisen Kaisha (9107.T: Quote, Profile, Research), reported strong annualresults on strong demand, led by China, for iron ore, coal, steeland cement that stoked demand for dry bulk carrier transport.
But higher fuel costs and the rapid appreciation of the yenagainst the dollar are expected to keep profits from risingfurther.
“The market is very good, but costs are going have a hugeimpact — the yen and fuel costs are going to hurt us in equalmeasure,” Nippon Yusen managing corporate director MakotoIgarashi told reporters, after reporting an 85 percent leap inrecurring profit for the year to March 2008. [ID:nT256GKIZD]
Nippon Yusen forecast virtually flat earnings for both itsdry bulkers and container lines but said it expected a recoveryat its air cargo unit would boost income, predicting a 6 percentrise in recurring profit, which before tax and exceptional items,to 210 billion yen ($2 billion) for the year to next March.
Rival Mitsui O.S.K, where recurring profit jumped 66 percentin the past year, said it expected recurring profit to dip 0.7percent to 300 billion yen. [ID:nT250WU1HC]
After a 97 percent leap in the just completed year, KawasakiKisen said its recurring profit would fall 4 percent to 121billion yen this year. [ID:nT250W06GR]
The lower profit outlooks from Mitsui O.S.K. and Kawasakimissed expectations. The Nikkei business daily reported earlierthis month that the shippers would still post modest growth inpretax income.
Kawasaki shares fell 3.2 percent to 1,074 yen and MitsuiO.S.K. shares slipped 1.3 percent to 1,415 yen. Nippon Yusen rose1.3 percent at 1,022 yen.