Japanese shipping company Kawasaki Kisen Kaisha (K Line) ended the first three quarters of 2018 fiscal year with a profit of JPY 9.3 billion (USD 85.5 million), compared to a loss of JPY 54.6 billion reported in the corresponding period last year.
As explained, the positive financial performance was a result of measures the company implemented to improve its profitability, including continued cost reduction and improvement of vessel allocation efficiency.
In addition, K Line carried out structural reforms in the previous two fiscal years in an effort “to enhance its competitiveness.”
Operating revenue for the nine-month period was JPY 884.1 billion, up by JPY 123.1 billion year-on-year (YOY).
The company’s containership business recorded a YOY growth in revenue and returned to profit from a loss in the same period of the previous year, while profits in the third quarter decreased as freight rates were lower than the expected level in the Asia-North America and other services.
Furthermore, the overall bulk shipping business segment recorded YOY growth in revenue and returned to profitability from a loss in the same period of the previous year.
On the other hand, the overall offshore energy E&P support and heavy lifter business segment recorded a decline in revenue but losses shrank when compared the same period in FY 2017.
In its outlook, K Line said: “Although the market has started to recover moderately, mainly in the dry bulk business, it is expected to take some time before the vessel supply-demand gap is fully resolved.
“Although freight rates for containerships are recovering after hitting bottom, they have remained top-heavy since the third quarter”, the company added.
As a result, the company has revised downward the forecasts of its overall results in the full year.
K Line further said that the business environment in the container shipping segment is expected to remain harsh including the anticipated effect from rising fuel price.
In this environment, K Line said it will provide “full support” for the start of the Ocean Network Express scheduled for April 2018.