K` Line suffers US$234.1 million half-year loss as sales fall 12pc

JAPAN`s No 3 container carrier, "K" Line, has posted a JPY18.6 billion (US$234.1 million) loss in the six months ending September 30 following a 12 per cent decline in revenue to JPY$496.9 trillion against JPY26.3 billion profit made in the same period last year.

Blamed are weakening American consumer spending, a financial crisis in Europe that together depressed demand in the company`s first half, as well as a rising yen and fuel costs and a flood of fresh tonnage afloat that further depresses freight rates.


As a result, operating revenues in the containership segment were JPY210.1 billion and operating losses were JPY17.7 billion.


Demand during the summer peak season from Asia to North America was lower than expected and the company`s number of loaded containers fell three per cent year on year. But loaded containers shipped from North America to Asia increased 16 per cent, said the company.


On European routes, "K" Line reported that the number of loaded containers shipped from Asia to Europe increased three per cent year on year and loaded containers from Europe to Asia increased 15 per cent. As a result, Europe service routes were up nine per cent overall.


"Demand remained strong in China, India and other emerging economy countries but economic growth is starting to lose momentum," said the company.


Since the financial crisis in 2008, the "K" Line group has maintained a reduced fleet size and engaged in cautious business management, said the company.


"K" Line`s dry bulk business was also sluggish resulting from an increase of supply of newbuildings and rising fuel costs. Ro-ro operations performed below expectations because of the Japanese earthquake and tsunami.


But the LNG carrier business did well as did the heavy lift segment.


As for the future, the company statement said: "We anticipate that demand in the containership segment will remain uncertain for the time being because of financial instability in Europe, sluggish consumer spending, and the slow recovery of unemployment in the United States."