In the first nine months of the fiscal year ending March 31, 2024 (April 1, 2023 to December 31, 2023), revenues amounted to ¥1,789.2bn (decreased by ¥260.9bn compared to the first nine months of the previous fiscal year), operating profit amounted to ¥144.2bn (decreased by ¥105.1 bn), recurring profit amounted to ¥200.2bn (decreased by ¥805.6bn), profit attributable to owners of parent amounted to ¥153.5bn (decreased by ¥766.7bn). The operating profit for first nine months is decreased by 42.2% y-o-y.
Overview by Business Segment:
Liner Trader
Container Shipping Division: Cargo demand was weak due to the impact of inflation and higher interest rates mainly in the United States and Europe. At the same time, shipping capacity increased following the completion of new ships, and as a result market levels were lower compared to the same period last year. At ONE, greatly lower freight rates caused profit levels to decline year on year.
Terminal Division: At the terminals in Japan, handling volumes increased year on year following the normalization of the containership schedules. At the overseas terminals, handling volumes declined year on year due to weak cargo volumes and the sale of shares of an affiliate at a terminal on the west coast of North America at the end of September. As a result of this, profit declined on lower revenue compared to the same period last year in the overall Liner Trade Business.
Shipments of e-commerce related cargo from Hong Kong and China to North America were strong through the end of the year. On the other hand, demand in the market as a whole remained weak, and the supply of space increased following the resumption of international passenger flights. As a result, cargo handling volumes declined slightly and freight rates were lower compared to the same period last year.
Air Cargo Transportation
Shipments of e-commerce related cargo from Hong Kong and China to North America were strong through the end of the year. On the other hand, demand in the market as a whole remained weak, and the supply of space increased following the resumption of international passenger flights. As a result, cargo handling volumes declined slightly and freight rates were lower compared to the same period last year. As a result of the above, profit declined on lower revenue compared to the same period last year.
Logistics
Air Freight Forwarding Business: Although cargo volumes mainly from Asia recovered in the third quarter, overall handling volumes and profit levels declined compared to the same period last year.
Ocean Freight Forwarding Business: Despite the expected recovery in the third quarter, cargo volumes were weak, and the downturn in the market caused sales prices to fall. As a result, handling volumes and profit levels declined compared to the same period last year.
Contract Logistics Business: The results were steady due to strong cargo volumes in the e-commerce, healthcare and automotive industries within Europe and firm demand for general consumer goods in North America.
As a result of the above, profit declined on lower revenue compared to the same period last year in the overall Logistics Business.
Bulk Shipping
Automotive Business Division: While port congestion and Panama Canal transit restrictions remained ongoing, the number of vehicles transported increased compared to the same period last year due to recovering automobile production volumes and firm vehicle sales. In the auto logistics business, handling volumes increased year on year in Europe, India, Mexico and part of Southeast Asia. Also, efforts were made to increase profitability and expand the business in Turkey and other growth markets.
Dry Bulk Business Division: The Capesize market was affected by the economic slowdown in China through August. However, from September, sentiment improved due to seasonally strong demand and additional economic stimulus measures in China, and combined with tighter supply-and-demand conditions in the Atlantic basin, market levels trended higher than the same period last year. In the Panamax and smaller segments, although shipment volumes of coal and grain were firm, markets trended below the high levels recorded during the same period last year. Within this business environment, efforts were made to reduce the risk of market volatility through the use of futures contracts, stabilize earnings through the acquisition of long-term contracts and reduce costs through efficient operations.
Energy Business Division: The VLCC (Very Large Crude Carrier) market softened in the second quarter due to seasonally weak demand and the decision by major oil producing countries to cut production. However, in the third quarter, a period of typically strong demand, exports from the Americas increased, and the market recovered. Also, supported by the strong market levels in the first quarter, markets trended at levels above the same period last year through the first nine months of the current fiscal year.
In the petrochemical tanker market, the trade patterns changed due to the impact of the ongoing situation in Russia and Ukraine, and the longer shipping distances caused supply-and-demand conditions to tighten. In the VLGC (Very Large LPG Carrier) segment, the increased long-distance shipments from the United States to Asia and the transit restrictions at the Panama Canal caused supply-and-demand conditions to tighten. After reaching record highs in September, market levels remained strong and trended at levels greatly exceeding the same period last year. In the LNG carrier segment, the results were steady on support from the long-term contracts that generate stable earnings. Also, in the offshore business, FPSO (Floating, Production, Storage and Offloading), drill ships and shuttle tankers were steady.
As a result of the above, both profit and revenue declined compared to the same period last year in the overall Bulk Shipping Business.
Real Estate and Other Businesses
Real Estate Business: Profit increased on lower revenue compared to the same period last year.
Other Business Services: Bunker fuel sales business was weak due to the drop in fuel oil prices. In the cruise business, ship maintenance including the replacement of electrical equipment commenced from mid-November. As a result, profit decreased on lower revenue compared to the same period last year in the Other Business Services segment.
Source: NYK Line
