During the first nine months of the fiscal year ending March 31, 2020
(from April 1, 2019 to December 31, 2019), operating revenues for the
nine-month period was ¥567. 189 billion (down ¥71.308 billion year-on-year),
operating income was ¥21.627 billion (compared to operating loss of ¥9.273
billion in the same period of the previous fiscal year), and ordinary income
was ¥24.539 billion (compared to ordinary loss of ¥27.427 billion in the same
period of the previous fiscal year). Profit attributable to owners of the
parent was ¥25.223 billion (compared to loss attributable to owners of the
parent of ¥30.953 billion in the same period of the previous fiscal year).
Dry Bulk Segment
Dry Bulk Business
In the Cape-size sector, under a declining tendency of iron ore volume
shipped from Brazil, the vessel supply increased in the Atlantic region because
the vessels with non-compliant fuels made ballast voyages to that region, ahead
of upcoming introduction of environmental regulations. In the medium and small
size vessel sector as well, market rates began to become sluggish from the
middle of the quarter as cargo movement of grains from South America and steam
coal to China slowed down. As a result, the overall Dry Bulk Segment recorded a
year-on-year decrease in revenue, but a profit increased by endeavoring
reduction of the operational costs and improvement in the vessel operation
Energy Resource Transport Segment
Tanker and Thermal Coal Carrier Business
Concerning large crude oil tankers (VLCCs), LPG carriers, and thermal
coal carriers, the business stayed firm for mid- and long-term charter
contracts and contributed to secure stable profit.
LNG Carrier and Offshore Energy E&P
Concerning LNG carriers, and drillship and FPSO (Floating Production,
Storage and Offloading system), the business stayed firm for mid- and long-term
charter contracts and contributed to secure stable profit.
Concerning the offshore support vessel business, the vessel supply and
demand partially improved, and a loss was narrowed. As a result, the overall
Energy Resource Transport Segment recorded a year-on-year decrease in revenue,
but a profit increased.
Product Logistics Segment
Car Carrier Business
The volume of finished vehicles shipped by the Group decreased
year-on-year because of the rationalization including cancellation and
realignment for some unprofitable trades including other-thanJapan trades, even
though stable cargo movements were maintained in the trades from the Far East.
As a result, the overall car carrier business recorded a year-on-year
decrease in revenue, but turned a profit by tackling to improve its
profitability including improvement in the vessel operation efficiency, optimization
of the fleet allocation, and reduction of the operational costs.
Despite the steady performance mainly in towage, sea-land integrated
transportation and warehousing business in the domestic logistics sector, by
having large effect of the air cargoes lifting decline due to the trade dispute
between the United States and China in the international logistics sector, the
overall logistics business recorded year-on-year decrease in both revenue and
Short Sea and Coastal Business
In the short sea business, the transportation volume steadily increased
mainly in steel materials and biomass fuel; in the meantime, it decreased
year-on-year in timber products. In the coastal business, the transportation
volume increased in liner transportation by the schedule stabilization as well
as it increased steadily in ferry business. As a result, the short seas and
coastal business overall recorded a year-on-year decrease, but a profit
In the operating revenues of OCEAN NETWORK EXPRESS PTE. LTD. (ONE), the
Company’s equity-method affiliate, by recovery of the liftings and the space
utilization, improvement of the freight rate of long-term contracts in North
America dominant services, improvement of the cargo portfolio, and the tackles
to improve its profitability including reduction of the operational costs
through realignment and rationalization of the trades, ONE overall recorded a
year-onyear increase and turned a profit.
Regarding the containership business remaining in the Company, a
year-on-year decrease in revenue was recorded, but a loss was narrowed due to a
decrease of the temporary losses occurred by the business transfer.
As a result, the overall Product Logistics Segment recorded a
year-on-year decrease, but a profit increased.
In Dry Bulk Segment, while there is a concern about impact to the cargo
movements by slowdown in Chinese economy, the Group will continue to improve
the vessel operation efficiency, save the costs, and reduce the market
exposure. In Energy Resource Transport Segment, securing stable profit under mid-
and long-term contracts is on-going expected. In Product Logistics Segment, the
car carrier business is expected to secure a profit by recovery of the freight
rates and effect of the trades rationalization, despite expected decline in
demand due to external factors, such as political instability in the Middle
East. ONE expects to improve its profitability by optimizing the cargo
portfolio and saving the costs, despite some concerned causes, including a
decrease of the cargo movements after the Chinese New Year and the trade
dispute between the United States and China.
As described above, even the business environment surrounding the
Company is continuously uncertain, the Company has kept unchanged its
previously announced forecasts of full-year results, including operating
revenues, ordinary income, and profit attributable to owners of the parent by
tackling to improve the revenue and expenditure through further enhancement to
reduce the costs and to improve the vessel operation efficiency.
“Our important task is to maximize returns to our shareholders while maintaining necessary internal reserves to fund our capital investment and strengthen our financial position for the sake of sustainable growth, which is a priority of our management plan. However, the slow down in the global economic outlook, by the trade dispute between the United States and China and escalating geopolitical tensions in the Middle East, could lead to deterioration in the transportation demand and the business environment remains critical toward achieving the consolidated full-year business forecasts, though the Company is taking measures to improve earnings now; thus, the year-end dividend remains yet to be determined,” the company stated.
Sea News, February 4