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TOKYO—Nippon Yusen K.K., Japan’s largest shipping line
by sales, forecasts- pretax profit will increase by
about 13 percent next fiscal year as it earns more from
container shipments and narrows losses at its air-cargo
business.
Earnings
at its dry-bulk unit will be little changed in the year
starting April 1, Makoto Igarashi, head of Nippon
Yusen’s investor relations departments, said in an
interview. The pretax-profit contribution from other
divisions will climb by about ¥25 billion ($231
million), he said. The company forecasts pretax profit
of ¥200 billion this fiscal year.
The
shipping line predicts pretax profit at its container
unit will more than double as it raises prices to carry
boxes to
North America. Tokyo-based Nippon Yusen’s profit surged to a record
in the last quarter as
China’s
economic growth spurred demand for ships to carry raw
materials such as iron ore.
“The
container business looks promising,” said Yoshihisa
Miyamoto, an analyst in Tokyo at Okasan Securities Co.
“Nippon Yusen is managing to reel in losses at its
air-cargo business.”
Miyamoto
raised his rating on Nippon Yusen to “neutral” from
“sell” earlier this month.
Nippon
Yusen’s container-shipping business will earn about ¥20
billion in pretax income, compared with ¥9.5 billion
this year, Igarashi said.
Container shipping was the company’s second-largest
business last year, accounting for 26 percent of Nippon
Yusen’s ¥2.16 trillion in sales. Shipments of bulk
commodities, cars, oil and gas accounted for 36 percent
of sales.
“Early
indications are that we will be able to push through
increases in rates on our North American routes in
negotiations this year,” Igarashi said in an interview
on February 15. “That will help boost profit overall.”
Nippon
Cargo Airlines Co., the shipping company’s air-transport
unit, will narrow its pretax loss next fiscal year to
¥16.5 billion from a projected ¥26.5 billion this fiscal
year, as the addition of new, more fuel-efficient
aircraft and the retirement of older planes help cut
costs, Igarashi said.
The unit
is speeding up the retirement of Boeing Co. 747-200Fs by
one year to remove all planes from service by the end of
next month, Nippon Yusen said on January 29. The unit
will have 10 Boeing 747-400Fs in place by the end of
March 2009, reducing fuel costs.
Nippon
Yusen will also probably boost pretax profits at its
ports and distribution divisions by about ¥5 billion in
total, Igarashi said. The units are forecast to earn
¥8.5 billion and ¥19 billion this fiscal year, according
to the company.
The
shipping line will expand its fleet by at least 35
percent to over 1,000 vessels by the end of March 2014,
Igarashi said. Nippon Yusen had 742 ships at the end of
March and will increase that to 932 vessels by the end
of March 2011, according to its medium-term business
plan.
Rival
Mitsui O.S.K. Lines Ltd., operator of Japan’s largest
merchant fleet, will increase its fleet to 1,000 ships
by the end of March 2010 and to 1,200 by the end of
March 2013, according to its mid-term business plan. It
had 803 ships at the end of March.
Nippon
Yusen rose 0.6 percent to ¥1,012 at the end of Tokyo
trading. It’s up 14 percent this year, compared with a
10-percent drop in the Nikkei 225 Stock Average.
(Bloomberg) |
