A decline in the container ship rates has hit Mitsui OSK Lines profits in the first quarter of the financial year.
For the three months to the end of June, revenue increased by 10.4% to ¥385bn ($2.7bn), compared with the same period in the previous year.
However, pre-tax profits fell by 179.2% to ¥109.6bn, and net income fell by 194.6% to ¥91.1bn in the period.
MOL said its results were a mixed picture, with profits falling significantly from its liner subsidiary Ocean Network Express (ONE), while other sectors showed improved performance.
“Profits decreased year on year due to a sharp drop in spot and term contract freight rates from container ships. However, ordinary profit excluding the container ship business increased due to favourable market conditions in the energy and car carrier business and the impact of foreign exchange rates,” MOL said.
Ordinary profits in MOL’s dry bulk business increased from ¥18.5bn in the first quarter of financial 2022 to ¥26.3bn in 2023.
Its energy business improved from ¥9.4bn to ¥19.5bn over the same period.
But, profits in its container ship segment fell from ¥234.4bn to ¥23.8bn in the first quarter of 2023.
“The decline in spot and term contract freight rates, particularly on Asia-North America and Asia-Europe routes, led to a sharp decline in profit, reflecting a significant drop from high freight rates levels during the Covid-19 pandemic in the same period last year,” said MOL commenting on the performance of its liner business.
For the full year ending on 31 March 2024, MOL is forecasting revenue of ¥1,530bn, compared with ¥1,611.9bn recorded in the previous year, and a fall in net profit to ¥215bn, compared to ¥796bn.
