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NYK profit falls 61pc to US$168.4 million as revenue falls 5.4pc

JAPAN's NYK Line posted a 61 per cent drop in year-on-year annual net profit to JPY18.23 billion (US$168.4 million), drawn on revenues of JPY2.27 trillion, which fell 5.4 per cent.

"The container shipping market continued to face extremely challenging conditions, which reached historical low freight level during the fiscal year under review," said the NYK statement accompanying the results. 



Although cargo volume was comparatively brisk along transpacific routes, the supply and demand balance in Europe widened as demand for freight shipments to the region declined due to its sluggish economy, the statement said.



"Newly built ultra-large containerships on European routes exacerbated the oversupply situation. The use of these new ships in Europe caused a chain reaction worldwide as increasingly larger capacity ships have entered other shipping routes, severely disrupting the balance between supply and demand," said NYK.



In response to these circumstances, NYK said it worked to keep its services competitive. Without reorganising the main routes it handles as a member of the G6 Alliance, the group rationalised its services according to demand, reorganised routes in Asia and along the east coast of South America in order to make them more efficient, and suspended service for some unprofitable routes. 



"Owing to these and other factors, revenues in the liner trade segment increased overall compared with the previous fiscal year, supported by year-on-year growth in handling volume at container terminals in Japan and around the world. On the other hand, the NYK Group posted a segment loss in the fiscal year under review," said NYK. 
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