Japanese shipping company Kawasaki Kisen Kaisha (K Line) has posted a profit of JPY 13.1 billion (USD 116.8 million) in the first half of 2018 fiscal year, covering the period from April to September, 2017, recovering from a loss of JPY 50.4 billion from the previous fiscal year.
The rebound was mostly driven by an increase in handling volume in the containership business which came at 6 pct year on year. Its car carrier division also saw a growth in revenue and profit, together with its dry bulk arm which managed to reduce its loss. However, the company’s LNG and tanker division booked a year-on-year decline in both revenue and profit.
Despite its business recovery, the company missed the forecast for its consolidated financial results.
Namely, the company forecast that its profit would reach JPY 160.05 billion, however the results were lower, standing at JPY 140.7 billion (USD 1.25 bn) for the six-month period.
The lower than expected profit was assigned to slower pace of recovery in the containership market, and the change in the business environment driven by the mergers and business integration between shipping companies, the realignment of alliances, and on-schedule delivery of new large vessels.
“As a result, the market conditions have become harsher than previously forecast,” the company said.
Due to the change in market conditions, K Line also revised its forecast for the full year, slashing its projections from anticipated JPY 224 million to JPY 90.96 million.
“A careful watch should be kept on the economic conditions, as a further rise in geopolitical tensions or the rollback of monetary easing in various countries could cause the economy to slow down. As for the business environment, the market is expected to continue to recover in the dry bulk business, but freights rates for containerships and tankers are likely to remain top-heavy,” K Line added.
“Although the group expects to return to profitability in the current fiscal year from a loss in the previous year, it has decided to pay no interim dividend and have forecast no year-end dividend for the current fiscal year.”