"K" Line's first half net profit rose 114 per cent to JPY440 billion (US$3.8 million) from JPY206 billion in the first half of last year, the Japanese shipping line announced.
The transport giant attributed its strong performance in the first half fiscal 2007 (April through September) to robust growth in economies of the US and Europe where high consumer spending prevailed despite signs of a slow-down in the American housing market.
The overall operating results in the container business increased in both operating revenues and profit year on year because of the progress in raising freight rates, supported by strong cargo movement in the European services and on north-south routes despite a negative impact from soaring oil prices, the company said.
First half operating income rose 162 per cent to JPY616 billion from JPY235 billion in the first half of last fiscal year while ordinary income rose 159 per cent to JPY637 billion from JPY246 billion year on year.
"K" Line said revenue rose 25 per cent to JPY6.4 trillion from JPY5.1 trillion year on year.
In the rapidly developing BRIC countries and the Middle East, expansion continued because of brisk capital expenditures and increasing consumer consumption, said the company.
"The Japanese economy was supported by strong business performances and improvement in the employment environment," said a company statement.
All of which drove dry bulk freight markets higher while rate restoration made steady progress on all trade lanes, said "K" Line, adding that there was extra benefit accruing in the US dollar currency fluctuation which helped to offset rising oil prices
Cargo movement in the containership business steadily grew supported by an expanding world economy, particularly in European services which increased 20 per cent compared with the same period last year thanks to an expanded EU, a stronger euro and a constantly growing Russian economy.
Supply and demand relationship for cargo spaces continued to be tight. The company's tonnage movement in the north European route increased 16 per cent compared with the same period last year helped along by the introduction of large 8,000-TEU containerships in this service since 2006.
In the North American services, though cargo movement of general consumer goods was brisk, said "K" Line, tonnage of housing and related-items was hit by a sluggish US housing industry. "As a result overall cargo movement grew only by mid-single digits compared with the same period of the previous year," said the company statement.
On the other hand there was no opening for new service routes and some shipping companies decreased capacity, resulting in a tight supply and demand relationship. "K" Line tonnage movement in North American routes increased 17 per cent from the same period a year earlier thanks to enhanced cargo space in the US east coast service in the second half of last year.
In other north-south service routes, cargo movement rose 31 per cent against the same period last year due to two newly opened services in Europe, and the South American east coast, and a newly launched large vessel in the Asia-South Africa service, as well as strongly expanding cargo movements.
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