TOKYO: NYK Line reported substantially improved financial performance in the last fiscal year FY 2017 ( ending March 2018 ) compared with its previous fiscal year. The Company posted ¥2,183.2 billion in Revenues, ¥27.8 billion in Operating Profit, ¥28.0 billion in recurring profit, and ¥20.1 billion in profit attributable to owners of the parent. Conditions in the maritime shipping market were positive on the whole during the fiscal year ended March 31, 2018. In the container shipping market, while an upswing in spot freight rates stalled somewhat as the total supply of tonnage remained at similarly high levels as the previous year, shipping traffic was stable on the back of solid demand for container shipments. In the dry bulk shipping market, although excess tonnage still exists, the cargo volume of iron ore, coal, and grains all increased and market conditions improved. Among the Group’s non-shipping businesses, the Logistics business faced a sluggish market due to persistently high cost prices, while the Air Cargo Transportation segment benefited from busy shipping traffic overall.
In the Container Shipping market, shipping traffic was brisk along transpacific routes, but an upswing in spot freight rates largely came to a standstill due to the impact of growing shipping capacity, which was caused by the production of new ultra-large container ships. Shipping traffic picked up along European shipping routes and the balance between supply and demand improved in the first half of the fiscal year, but shipping traffic slowed down overall in the second half. NYK Line and four other companies began offering new services as THE Alliance during the fiscal year under review. Under THE Alliance, efforts were made to boost the efficiency of various services while and enhancing their user-friendliness and competitiveness. The NYK Group worked to limit fleet and operating costs by continuing efforts to boost cargo-loading efficiency, switch to new highly fuel-efficient vessels with capacity of 14,000 TEU, and optimize vessel assignment and economic performance in accordance with the circumstances of shipping routes. By implementing measures for cutting freight costs, particularly through the efficient operation of container ships, the Group improved profitability and its resistance to market fluctuations. Meanwhile, overall handling volume at container terminals in Japan and around the world increased year on year. Owing to these factors, results in the Liner Trade segment as a whole improved substantially, with the segment posting higher revenues and a profit compared with a loss in the previous fiscal year. In addition, NYK Line integrated its container shipping business with those of Kawasaki Kisen Kaisha, Ltd., and Mitsui O.S.K. Lines, Ltd., as a means of boosting competitiveness in the market and ensuring stable and sustainable container shipping operations. The jointly established company, OCEAN NETWORK EXPRESS PTE. LTD. (hereafter, “ONE&rdquo began offering services from April 1, 2018.
In the air freight forwarding business, although cost prices remained high, gross profit improved particularly in Japan as a result of efforts to revamp the business. In the ocean freight forwarding business, although handling volume was up, time was needed to boost gross profit amid high cost prices. Meanwhile, the logistics business struggled due to steep rises in personnel costs and slow-moving handling volume for the inland transport business in the Americas. In contrast, the coastal transportation business benefited from brisk shipping traffic throughout the fiscal year. Due to these results, revenues increased but profit was down compared with the previous fiscal year in the Logistics segment as a whole. In addition, consolidated subsidiary Yusen Logistics Co., Ltd., was delisted on January 29, 2018, and turned into a wholly owned subsidiary effective from February 1, 2018. Bulk Shipping Car Transportation Division The automobile transport market was slow to recover amid persistently low crude oil prices and a declining volume of automobile shipments to emerging and resource-rich countries. Nevertheless, owing to solid demand for automobile shipments to North America, Europe and Asia, the Group shipped a higher number of new vehicles than in the previous fiscal year. In the automobile logistics business, established operations performed solidly overall, especially automobile logistics centers in China, India and Europe. Meanwhile, the Group proceeded to proactively develop environmentally friendly “green terminals” around the world, and decided to install wind turbines for generating wind power at its logistics terminal for finished vehicles in Belgium.