Asia/Pacific News
MOL Narrows Quarterly Losses
Tokyo headquartered shipping firm Mitsui O.S.K. Lines, Ltd. [TYO:9104] (MOL) has published its results for 2012 fiscal year first quarter ended June 30, 2012 showing a net loss for the period of ¥5.02 billion ($63 million) or -¥4.20 ($0.053) per share compared with a loss of ¥8.05 billion ($102 million) or -¥6.73 (-$0.086) per share in Q1, 2011.
Revenue was up 8.5% to ¥378.85 billion ($4.78 billion) in the period.
Despite making an improvement in its bottom line, MOL said it recorded the loss as a result of poor global economic conditions, high bunker fuel costs, oversupply of vessels, and overall lower freight rates.
MOL said its bunker prices in the period rose $70 per metric tonne (pmt) to $695 pmt from $625 pmt in the same period last year.
Total assets for the quarter stood at ¥1,988.5 billion ($25.07 billion), an increase of ¥42.4 billion ($540.42 million) from Q1, 2011 and was attributed mainly to the delivery of new vessels.
Bulk ships revenue rose 10.8% to ¥189 billion with MOL saying it tried to reduce costs through efficient vessel operation, but oversupply caused the dry bulker and Capesize bulker market to be "stuck at bottom levels" and overall the segment narrowed last years loss of ¥4.7 billion to a loss of ¥2.3 billion.
Supply and demand conditions, and therefore freight rates in the container ship segment had improved, but despite this the segment made a loss of ¥2.4 billion versus last years loss of ¥5.4 billion, with MOL adding its efforts to reduce costs through enhanced slow steaming were restricted by the rise in bunker prices.
The company said its LNG carrier segment proceeded firmly thanks to new vessels and stable LNG demand in Japan.
Its car carrier segment "generally recovered" and firm performance from cross trade and Asia-bound transport from Europe and the U.S. contributed towards "a significant year-on-year improvement in the ordinary income/loss."
Looking forward, MOL said it expected bunker prices to remain lower than initial expectations and freight rate levels in the containership business to improve, but nevertheless the strong Yen, economic problems in Europe, and delays in recovery of the dry bulker and the tanker markets were all causes of concern.
