MOL Restructures Battered Dry Bulk Business
Japanese shipping company Mitsui O.S.K. Lines, Ltd. plans to restructure its ailing dry bulk business division effective April 1, 2016, the company said.
MOL said that the plan will include establishment of a new business unit- the Dry Bulk Business Unit to most effectively implement business structural reforms to optimize the fleet portfolio and make more efficient use of management resources.
The announcement comes in the aftermath of MOL’s recorded net profit of JPY 13.2 bn (USD 110 million), plunging from last year’s JPY 24.8 bn amid containership and bulker woes.
The company anticipates to record an extraordinary loss of up to JPY 180 billion in the fourth quarter of this fiscal year, due to costs for the business structural reforms including disposal of vessels in the dry bulker and containership businesses. Namely, MOL plans to cut a number of its container and dry bulk ships, which are not on long-term contracts.
For the full year, the company predicts its loss to deepen to JPY 175bn (USD 1.45bn), considerably higher from the previously announced JPY 17bn.
As a result of its restructuring plan MOL will also post a one-time extraordinary loss of about JPY180 billion in 4Q FY2016.
In addition, the Japanese shipping conglomerate revealed plans to establish the Energy Transport Business Unit to manage business divisions by ship type. The unit would be in charge of tankers, LNG carriers and offshore related activities.