Lower Bunker Prices Should Fuel Better Than Expected Performance for NYK

by Ship & Bunker News Team
Wednesday October 29, 2014

Japanese shipping company Nippon Yusen Kabushiki Kaisha (NYK Line) will likely see its pretax profit jump by a third between April and September, fueled by declining oil prices and a weak yen, according to a report by the Nikkei Asian Review.

Pretax profit is expected to come in at ¥34 billion ($312 million), beating original forecasts of ¥30 billion ($277.8 million).

The company saw profit in the container industry for the first time in three quarters, as the drop in crude oil prices prompted increased shipments of consumer goods and building materials bound for North America.

As NYK uses the dollar for 80 percent of its shipping charges, the company has capitalised on a devalued currency.

Gains however, were somewhat offset by struggling bulk carriers, as plunging freight rates meant that the company's Capesize ships and mid-sized Panamax carriers failed to break even.

The Baltic Dry Index, which gauges rates for shipping raw materials such as iron, fell to an 18-month low in July.

The uncertainty of bulk carrier performance has also tempered NYK's outlook for its full-year ending March 2015.

Full-year pretax profit is expected to rise 11 percent to ¥65 billion ($602 million) with the company unlikely to raise estimates.

The company is also currently making forays into liquefied natural gas (LNG), having announced that it s developing a LNG bunkering vessel.

Ship & Bunker News Team
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