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'K' Line plunges into US$457 million net loss as revenues shrink 8.1pc
JAPANESE shipping major Kawasaki Kisen Kaisha ("K" Line) posted an annual year-on-year net loss of JPY51.4 billion (US$457.02 million), drawn on revenues of JPY1.24 billion, down 8.1 per cent.
"Extraordinary losses were posted as the result of group's business structural reform to reduce the risk of exposure to market conditions and further accelerating the reduction of fleet scale, focused on small- and medium-size vessels, in the dry bulk business," said the company statement accompanying the results.
"Containerised cargo volume loaded on the Asia-North America service for round-trip voyages overall recorded an increase of two per cent year on year, supported in part by the firm undertone of the US economy," the statement said.
On other routes, however, cargo volumes declined 13 per cent in the Asia-Europe service, around 15 per cent in the intra-Asia service, and around seven in the North-South service, mainly reflecting a slump in demand due to uncertainty in the European economy, the economic slowdown in China and the fall in resource prices, as well as further reduction in sailings and rationalisation of services.
Overall cargo volume loaded for the group declined five per cent year on year. The freight rate market fell notably in the Asia-North America service from the third quarter due to deterioration in the vessel supply-demand balance.
But the market also continued to slump in the Asia-Europe and North-South services, said "K" Line.
"As a result, the average freight rate for the across all routes was lower than the previous fiscal year. The group strengthened its competitiveness by completion of five new large-sized vessels with loading capacity of 14,000 TEU, while continuing various cost reducing efforts," the statement said.
These included reducing space and sailings on the Asia-Europe service in response to a decline in demand, rationalising the North-South and intra-Asia services, and cutting the cost on forwarding empty containers.
"Despite these efforts, the group's sales declined year-on-year resulting in a loss," said the statement.
In the logistics business, including inland transportation and warehousing, domestic logistics services performed strongly, mainly in inland transportation.
In international logistics services, the handling of air freight cargo from Asia, including Japan, declined due to the clearing of port congestion on US west coast and slowdown in the Chinese economy.
Overall, the logistics business saw both revenue and income decline year-on-year, the company said.
"Extraordinary losses were posted as the result of group's business structural reform to reduce the risk of exposure to market conditions and further accelerating the reduction of fleet scale, focused on small- and medium-size vessels, in the dry bulk business," said the company statement accompanying the results.
"Containerised cargo volume loaded on the Asia-North America service for round-trip voyages overall recorded an increase of two per cent year on year, supported in part by the firm undertone of the US economy," the statement said.
On other routes, however, cargo volumes declined 13 per cent in the Asia-Europe service, around 15 per cent in the intra-Asia service, and around seven in the North-South service, mainly reflecting a slump in demand due to uncertainty in the European economy, the economic slowdown in China and the fall in resource prices, as well as further reduction in sailings and rationalisation of services.
Overall cargo volume loaded for the group declined five per cent year on year. The freight rate market fell notably in the Asia-North America service from the third quarter due to deterioration in the vessel supply-demand balance.
But the market also continued to slump in the Asia-Europe and North-South services, said "K" Line.
"As a result, the average freight rate for the across all routes was lower than the previous fiscal year. The group strengthened its competitiveness by completion of five new large-sized vessels with loading capacity of 14,000 TEU, while continuing various cost reducing efforts," the statement said.
These included reducing space and sailings on the Asia-Europe service in response to a decline in demand, rationalising the North-South and intra-Asia services, and cutting the cost on forwarding empty containers.
"Despite these efforts, the group's sales declined year-on-year resulting in a loss," said the statement.
In the logistics business, including inland transportation and warehousing, domestic logistics services performed strongly, mainly in inland transportation.
In international logistics services, the handling of air freight cargo from Asia, including Japan, declined due to the clearing of port congestion on US west coast and slowdown in the Chinese economy.
Overall, the logistics business saw both revenue and income decline year-on-year, the company said.
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