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NYK warns of US$67.5 million operating loss not profit as earlier forecast

JAPAN's NYK has issued a profit warning for its fiscal year, citing costs of transferring its container business to a joint venture, losses at its unit Nippon Cargo Airlines (NCA) and high bunker prices.

In the first half of the current fiscal year, which ends September 30, NYK expects a JPY7.5 billion (US$67.5 million) operating loss instead of the JPY13 billion operating profit it had been forecasting.

In April, NYK expected revenues of JPY1.8 trillion (US$16.3 billion), operating profit of JPY37 billion and a net profit of JPN29 billion for the current April 1 - March 31 fiscal year.

But the new alert says it now expects fiscal year revenue to be JPY1.76 trillion, operating profit to be JPY2 billion and a net profit of JPY12 billion.

NYK has formed a new container shipping joint venture with fellow Japanese shipping companies MOL and "K" Line called Ocean Network Express (ONE) that began operating on April 1.

When ONE began operating, NYK shut down its former stand-alone container shipping operation. In announcing the revised forecast it said the one-off cost required for terminating its former container business "has been discovered to be higher than initially projected".

The other major cause of the downward revision cited by NYK was the decision to ground the fleet of NCA last month.

Source: Schednet

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