MOL narrows operating loss to US$31 million as revenues rise 5.5pc

JAPAN's largest carrier, MOL, has posted a first half operating loss of JPY2.3 billion (US$30.7 million), reducing it from JPY10 billion lost in the same period last year.

Despite a revenue increase of 5.5 per cent year on year to JPY756.9 billion in the April-September period, the company suffered a net loss of JPY13 billion though reducing it from the JPY16 billion lost in the same period last year.

In the container trade, MOL said the supply-demand environment improved since the beginning of spring. But Asia-Europe trade was weaker than expected in the summer peak season, leading to weakening freight rates.

In response, MOL rationalised its services together with other G6 alliance carriers "under pressure of newbuilding vessel supply." Also, it enhanced super-slow steaming for further cost reduction.

MOL's profitability in the container trade improved but the segment remained in the red in April-September period. It experienced a loss of JPY2.6 billion, significantly reducing the half-year loss of JPY10.5 billion in the same period last year. Revenues on container shipping segment were JPY303.7 billion from April 1 to September 30, up 7.4 per cent from JPY282.7 billion one year earlier.

Looking ahead, MOL forecasts that the business environment will remain harsh in the near term due to strong yen, high bunker prices, pressure from larger numbers of new ship deliveries and a stagnation in European economies.

"We will continue pushing ahead with rationalisation efforts in the containership business, including reducing the frequency of services, as well as organising and/or expanding shipping routes," said the company statement.