K` Line back in black, revenue up 31pc to US$253 million

JAPANESE shipping giant "K" Line is back in the black, declaring a first quarter fiscal profit of JPY15.8 billion (US$178.6 million) against last year`s quarterly loss of JPY14.8 billion.

This year`s April 1 to June 30 first quarter profit was drawn on revenues of JPY253.7 billion against last year`s quarterly sales of JPY191.9 billion, an increase of 31 per cent. Revenue from containerships stood at JPY112.2 billion, thus contributing JPY9.6 billion to overall profits


"During the first quarter of fiscal year, the world economy continued to gradually recover from the global recession," said the company statement accompanying the results.



Kawasaki Kisen Kasha, better know as "K" Line, attributed global recovery mostly to robust economic growth in China, India and newly industrialised countries.


"In the US, government economic stimulus measures were successful and higher employment fuelled a rebound in personal consumption. In Europe, the economic crisis triggered by the sovereign debt turmoil in Greece shook the value of the euro in currency markets, leading to concern about a ripple effect on a real economy that had been showing signs of recovery. The Japanese economy showed signs of improvement," said the company statement.


Container movement from Asia to North American rebounded as a result of economic improvement in the US, "K" Line said. The volume of cargo bound for North American ports increased six per cent compared with the same period of the preceding year,


"Nevertheless, total [container] volume on North American routes was flat year on year, owning to a decline in cargo volume from North American to Asia as the impact of winter decrease in the number of voyages extended into the beginning of the fiscal year," said the company statement.


"Cargo movement rebounded on European routes as well with volume from Asia to Europe and the Mediterranean increasing 14 per cent in comparison with the same period of the preceding year when volume bottomed out. Cargo volume from Northern Europe and the Mediterranean to Asian increased five per cent as well, and overall cargo volume on European routes increased nine per cent year on year," said the "K" Line statement.


"Combined [container] volume including North South routes and intra-Asia routes increase six per cent. The balance of supply and demand tightened owing to recovery in cargo movement and slow steaming and cargo owners increasingly sought to secure space. As a result the company made progress with restoration of freight rates from depressed levels of the previous year for all routes and recorded higher revenues.


"Although a steep rise in fuel oil prices and other factors put pressure on profits, business returned to profit and the company proactively implemented route optimisation, eco-friendly slow steaming and other cost reduction measures and containership business structural reform implemented the previous fiscal year contributed to profitability improvement," said "K" Line.