TWO Japanese shipping giants - NYK and "K" Line - told much the same tale in their quarterly reports, with both being encouraged by US growth and a rise in consumer demand and frustrated by still stagnant Europe.
In NYK's case, there was a quarterly year-on-year net loss of JPY12.78 billion (US$123.31 million), drawn on revenues of JPY470.75 billion.
In "K" Line's case there was a quarterly net loss of JPY26.7 billion compared to a JPY10.19 billion profit in the corresponding quarter the year before. But "K" Line's quarterly revenue took a 27 per cent year-on-year plunge, coming in at JPY244.5 billion.
Said the NYK statement accompanying the results. "The United States despite and uncertain outlook for the labour market, consumer spending picked up and the economy was strong overall.
"In Europe, however, the economic climate became unstable amid falling stock prices and the pound, in the aftermath of the United Kingdom's decision to leave the European Union a national referendum on June 23," said the NYK statement.
"K" Line's analysis was much the same but it made no mention of the Brexit vote in the UK.
Continued NYK: "Against this backdrop, the company posted losses at every level in its statements of income.
"In the container shipping market, spot rates for the transpacific route decreased. In that context, negotiations of renewal, of annual contracts in May, ended with poor conditions, negatively affecting profitability," said the NYK statement.
"Market conditions surrounding European shipping routes remained harsh as supply continued to exceed demand and confusion lingered in the European economy," the NYK statement said.
Said the "K" Line statement: "The average freight rate fell below previous levels as a result of a deteriorating supply demand balance globally.
"As for the Asia-Europe service, cargo volume decreased four per cent year on year as a result of the company curbing cargo space in response to concern of slowing economic recovery in Europe." said "K" Line.
"In the intra-Asia service, also plagued by a lack of momentum with respect to cargo movements, cargo volume decreased by seven per cent year on year amid a deteriorating balance of supply and demand due to increased supply," said the "K" Line statement.
Source: SchednetPrevious Next