TOKYO: Mitsui O.S.K. Lines (MOL) has reported JPY 29.2 billion (USD 258.6 million) worth of profit attributable to owners for the third quarter of the 2017 fiscal year (1st April – 31st December 2017), up from JPY 19.02 billion posted in the corresponding quarter a year earlier.
The company’s revenue stood at USD 10.9 billion, while its operating profit was USD 215 million in the quarter, recovering from an operating loss a year earlier.
For the nine-month period from April to December 2017, revenue was up 14.6 percent when compared to the same period from 2016 reaching JPY 1.23 trillion, while profit was 53.6 percent higher year-on-year, standing at JPY 29.2 billion.
The better financial performance was mainly driven by the group’s containership business which reported 26.8% higher revenue year-on-year and its dry bulk shipping unit which reported 19.8% higher profit year-on-year.
Higher annual contract freight rates following contract renewals since the start of the year and efforts to cut operating costs also contributed to cutting losses in the boxship division.
However, MOL’s tanker business was down with 47.7 % profit plunge year-on-year. VLCC earnings were affected by prolonged OPEC cuts coupled with rampant vessel deliveries. Slowdowns in cargo volumes in product tanker sector and supply and demand imbalance in LPG market exerted further pressure on the sector.
The LNG carrier division recorded a stable ordinary profit mainly through medium- to long-term charter contracts, including three newly built vessels. The offshore business division also recorded a stable ordinary profit, brought about by operations of a new FPSO unit and the favorable revenues from the subsea support vessel business.
For the full fiscal year ending March 31, MOL forecasts its profit to be USD 90 million and its revenues to reach USD 14.6 billion.
Looking ahead, the dry bulk shipping market is expected to proceed firmly again from the start of the year, supported by a robust supply and demand environment. With respect to the VLCC market, a moderate recovery is anticipated during the period of winter demand that lasts until around the end of February, and then gradually soften again after that.
With regard to container shipping, MOL forecasts a jump in spot freight market when the market heats up for cargo volumes from Asia across all routes due to the rush in demand prior to the Chinese New Year holidays in mid-February. The slack seasons that ensues will push the rates a bit down, MOL added.