Mitsui OSK Lines (MOL) returned to the black in FY2018, ended 31 March 2019, and is forecasting a better year ahead.
One of Japan’s “big three” shipowners MOL JPY28.88bn ($242.14m) for FY2018 compared to a JPY47.38bn in the previous financial year. This was despite revenues falling to JPY1.23trn in FY2018 against JPY1.65trn in the previous year.
Looking ahead to FY2019, year ended 31 March 2020, the company forecast a profit of JPY40bn, an increase of 48.8%, revenues are expected to decrease by 3.2% in FY2019 to JPY1.19 trillion.
The forecast improved profitability is based on an expected improvement in major shipping markets.
Looking at dry bulk MOL said, “We expect that on the Capesize bulker market, the rate will recover in the second half of the fiscal year despite continued concern over the impact of the mining dam collapse in Brazil. The rate for Panamax and smaller bulkers is also expected to remain firm at the FY2018 level because a certain degree of demand for coal and grain shipments is expected.”
Commenting the VLCC market the company said: “Overall seaborne crude movements are expected to increase, albeit slightly, because although the volume of oil shipments from the Middle East is expected to decrease slightly due to the extension of oil cuts by OPEC, increased exports of Atlantic oil including North American shale oil are expected to cover growth in demand for oil.” While the supply of new vessels is expected to remain high scrapping is also expected to increase due to the IMO2020 regulation and the Ballast Water Management Convention.
For container shipping it said that the Ocean Network Express (ONE) joint venture with NYK and K Line was expected to see volume and utilisation levels return a level comparable to that prior to the merger.
“ONE aims to move into profit by focusing on initiatives such as cargo portfolio optimization, product rationalization, starting with a new North America West Coast-North Europe pendulum service, and reduction of fuel consumption and overhead costs,” MOL added.