NYK Reports 9M 2024 Results: Revenue Up, Profits Surge with Restructuring

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Japanese shipping conglomerate, NYK Line reported significant growth in its financial results for the first nine months of the fiscal year ending 31 March 2025. In 9M 2024, the company posted revenues of ¥1,976.9bn, reflecting a year-on-year increase of ¥187.7bn, the operating profit surged to ¥178.1bn, up by ¥33.8bn, while recurring profit saw a robust jump of ¥236.1bn to ¥436.4bn. Profit attributable to owners of the parent company also saw a sharp rise, increasing by ¥241.9bn to ¥395.4bn.

Notably, the company recorded a significant ¥263.1bn in non-operating income, driven by equity in the earnings of unconsolidated subsidiaries and affiliates. The standout contributor was the company’s stake in Ocean Network Express (ONE), which brought in ¥228.4bn, thanks to a strong performance in the liner shipping business.

Restructuring Leads to New Reportable Segments
In a strategic move, the company has reclassified its operations following a partial review of its business management structure. The previously consolidated Bulk Shipping Business has now been segmented into the Automotive Business, Dry Bulk Business, and Energy Business. The Real Estate Business has been reclassified under “Other Business,” reflecting its relative size within the company.
This restructuring has also prompted the reclassification of the financial figures for the nine months ended December 31, 2023, to align with the new structure.

Liner Trade Business
The company’s Liner Trade Business reported a mixed performance across its divisions. The Container Shipping Division faced tight supply-demand conditions, exacerbated by ongoing port congestion, particularly in the Red Sea, and robust cargo movements. Although market conditions softened towards the third quarter, the division still saw an increase in profits and revenues compared to last year. ONE, the company’s key affiliate, recorded substantial profit growth, driven by higher freight rates and increased cargo handling.

Meanwhile, the Terminal Division showed flat year-on-year performance in Japan, though overseas terminals saw a decline in handling volumes due to the sale of shares in a North American terminal. Overall, the Liner Trade Business posted a 10.4% decrease in revenues from ¥153bn in 9M 2023 to ¥137bn in 9M 2024, but a 452.3% increase in profits.

Air Cargo and Logistics
The Air Cargo Transportation Business performed strongly growing by 15.85% from ¥122.6bn in 9M 2023 to ¥142bn in 9M 2024, with a boost from high demand for e-commerce shipments from Asia to Europe and the US, as well as semiconductor manufacturing equipment and automotive-related cargo. Cargo handling volumes grew, and freight unit prices remained elevated due to supply-demand imbalances.

In the Logistics Business, the company reported an 18.1% increase in revenues despite a 0.3% decline in profits. Air Freight Forwarding volumes surged, thanks to strong demand, particularly in the third quarter. Ocean Freight Forwarding also benefited from heightened demand driven by geopolitical concerns such as labour negotiations on the US East Coast and potential tariff hikes.

The Contract Logistics Business, however, faced a slowdown in Europe and East Asia, although other regions helped offset the downturn.

Specialized Segments
The Automotive Business also showed resilience rising by 8.3% from ¥374.7bn in 9M 2023 to ¥405.7bn in 9M 2024, benefiting from strong demand in the auto logistics and marine transport sectors. Despite challenges like port congestion and route adjustments due to the Middle East conflict, the division’s overall performance exceeded expectations.

Meanwhile, the Dry Bulk Business reported higher revenues and profits year-on-year, despite a market softening in the third quarter. Both the Capsize and Panamax markets saw strong performances in the earlier part of the year, although they softened towards the end.

In the Energy Business, the company faced mixed results. While the LNG Carrier business performed steadily, supported by long-term contracts, the Very Large Crude Carrier (VLCC) and Very Large Gas Carrier (VLGC) sectors experienced declines in market levels due to weaker demand, particularly in China. Despite this, the company’s energy segment still posted an overall revenue increase, although profits declined.

Outlook for the Remainder of the Year
Looking ahead, the company has revised its full-year financial forecast, raising expectations for several segments. Although the Liner Trade Business expects a slight decline in short-term freight rates, profits for the full year are projected to be higher than originally anticipated due to strong third-quarter results. The Air Cargo Transportation Business and Automotive Business are also expected to exceed earlier profit forecasts, driven by sustained demand.

However, challenges remain in the Energy Business, particularly with declining market conditions for VLCCs and VLGCs, while the LNG carrier sector is expected to exceed forecasts. Despite these mixed results, the overall outlook for the fiscal year remains optimistic, with the company projecting higher profits than initially expected.

As the company continues to navigate a dynamic global shipping landscape, its strategic restructuring, strong demand in key markets, and robust performance in several core sectors position it for continued growth in the final quarter of the fiscal year.

Author: Shruti Sasidharan

Source: Ti Insights

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