MOL’s Profits Drops as Revenue Rises

Japanese shipping company Mitsui O.S.K. Lines continued its earnings streak for the period ended September 30, as it delivered a profit for the first half of fiscal year 2017.

The profit decreased by 18 percent year-on-year to JPY 13.1 billion (USD 115.6 million) at the end of the first half, compared with JPY 16 billion (USD 141.2 million) reported in the period from April 1 to September 30, 2016. MOL’s revenue for the half was up by 14.8 percent to JPY 818.9 billion from JPY 713.5 billion seen a year earlier.

The company also managed to post an operating profit of JPY 11.1 billion, against an operating loss of JPY 2 billion reported in the previous year.

“Looking at the maritime shipping market conditions, the dry bulker market proceeded firmly amid a scenario of improving market conditions owing to robust demand for coal and grain shipments from the east coast of South America, despite the prolonged impact of a cyclone in eastern Australia and downturn of cargo volume from Brazil,” MOL said.

The very large crude oil carrier (VLCC) market has remained at low levels due to factors that include permeating adverse effects of decisions by OPEC countries to reduce oil production along with arrival of the spring and summer low-demand period, combined with other factors such as a steady pace of new vessel deliveries.

In the containership freight market, on the Asia-North America routes, the highest ever cargo volumes from Asia were recorded due to the robust U.S. economy, and on the Asia-Europe routes cargo volumes from Asia also proceeded steadily. Nevertheless, “spot freight rates over the busy summer season were lackluster” largely due to a growing capacity supply brought about by large containerships, MOL said.

Looking ahead, MOL expects that the world economy will continue to achieve gradual expansion. The company forecast a revenue of JPY 1.61 trillion, operating profit of JPY 20 billion and profit attributable to owners of parent of JPY 12 billion.

*JPY 1 = 0.0088 USD