Home / Shipping News / International Shipping News / NYK Reports Improved Quarterly Results

NYK Reports Improved Quarterly Results

Consolidated Financial Results for the Three Months Ended June 30, 2021 (April 1, 2021 to June 30, 2021)

(1) Consolidated Operating Results
(Percentage figures show year on year changes)

(Note) Comprehensive income:
Three Months ended June 30, 2021: ¥164,721 million (-%), Three Months ended June 30, 2020: ¥6,937 million (-%)

(2) Consolidated Financial Position

(Reference) Shareholders’ equity: As of June 30, 2021: ¥ 765,786 million, As of March 31, 2021: ¥ 625,332 million

2. Dividends

(Note) Revision of forecast for dividends in this quarter: Yes

3. Consolidated Financial Results Forecast for the Year Ending March 31, 2022 (April 1, 2021 to March 31, 2022)
(Percentage figures show year on year changes)

(Note) Revision of forecast in this quarter: Yes

4. Notes
(1) Changes of important subsidiaries in the period: None
(Changes in specified subsidiaries involving change in consolidation scope)
New: None Exclusion: None

(2) Particular accounting methods used for preparation of quarterly consolidated financial statements: None

(3) Changes in accounting policy, changes in accounting estimates, and restatements
1. Changes in accounting policy in accordance with changes in accounting standard: Yes
2. Changes other than No.1: None
3. Changes in accounting estimates: None
4. Restatements: None

(4) Total issued shares (Ordinary shares)
1. Total issued shares
(including treasury stock)
2. Number of treasury stock
3. Average number of shares
(cumulative quarterly period)

*This financial report is not subject to the audit procedure.
*Assumptions for the forecast of consolidated financial results and other particular issues
Foreign exchange rate:
(for the second, third and fourth quarter) ¥105.00/US$
(for full year) ¥106.20/US$
Bunker oil price:
(for the second quarter) US$499.00/MT
(for the third quarter) US$489.00/MT
(for fourth quarter) US$469.00/MT
(for full year) US$474.73/MT
*Bunker oil price is on average basis for all the major fuel grades including VLSFO.
The above forecast is based on currently available information and assumptions that NYK Line deems to be reasonable. NYK Line offers no assurance that the forecast will be realized. Actual results may differ from the forecast as a result of various factors. Refer to pages 2-7 of the attachment for assumptions and other matters related to the forecast.
(Methods for obtaining supplementary materials and content of financial results disclosure)
NYK Line is to hold a financial result presentation meeting for analysts and institutional investors.

1. Qualitative Information on Quarterly Results
(1) Review of Operating Results

In the first quarter of the fiscal year ending March 31, 2022 (April 1, 2021 to June 30, 2021), consolidated revenues amounted to ¥504.6 billion (increased ¥143.4 billion in the first quarter of the previous fiscal year), operating profit amounted to ¥53.0 billion (increased ¥44.0 billion in the first quarter of the previous fiscal year), recurring profit amounted to ¥153.6 billion (increased ¥137.0 billion in the first quarter of the previous fiscal year), profit attributable to owners of parent amounted to ¥151.0 billion (increased ¥139.4 billion in the first quarter of the previous fiscal year).

Due to the strong performance of OCEAN NETWORK EXPRESS PTE. LTD. (ONE), our equity-method affiliate, equity in earnings of unconsolidated subsidiaries and affiliates of ¥113.3 billion in non-operating income was recorded. Within this amount, equity in earnings of affiliates from ONE was ¥106.7 billion.

Changes in the average exchange rate between the U.S. dollar and yen as well as the average bunker oil price during the first quarter of the current and previous fiscal years are shown in the following tables.

Note: Exchange rates and bunker oil prices are our internal figures

Overview by Business Segment

Business segment information for the three months ended June 30, 2021 (April 1, 2021 to June 30, 2021) is as follows.

From the first quarter of the fiscal year ending March 31, 2022, “Global Logistics” has been renamed to “Liner & Logistics.” Information for the first quarter of the previous fiscal year is also presented under the name after the change.

Liner Trade

In the container shipping division, continued soaring cargo demand combined with slower vessel and container turnaround times caused by port and inland congestion led to further tightening of the supply and demand balance at ONE. Also, freight rates rose to much higher levels year on year, and liftings increased. In particular, on major trades, liftings were almost unchanged on North America trades year on year due to the impact of sailing schedule delays but increased on Europe trades. On both trades, freight rates and utilization trended at levels exceeding the same period last year, resulting in a majorimprovement to the bottom line.

Within the current situation, ONE worked to procure containers, minimize the schedule delays by increasing vessel sailing speed and eliminate other issues in order to maximize the space available aboard the vessels.

At the company’s terminals in Japan and overseas, handling volumes recovered from the impact of the COVID-19 pandemic in the same period last year.
As a result of the above, profit increased on higher revenue in the Liner Trade as a whole compared to the same period last year.

Air Cargo Transportation

In the Air Cargo Transportation segment, while international passenger flights continued to be suspended and cancelled due to the COVID-19 pandemic, cargo volumes mainly of automotive components, semiconductors, e-Commerce and telework related goods were firm. In addition, the trend of shifting some maritime cargo to air freight continued due to the shortage of space aboard containerships and port congestion. This caused cargo volumes and unit freight rates to trend at high levels.
As a result of the above, profit increased on higher revenue in the Air Cargo Transportation as a whole compared to the same period last year.

Logistics

In the air freight forwarding business, the supply and demand balance tightened due to the decreased supply of space resulting from the continuance of cancellation and suspension of international passenger flights and the shifting of some maritime cargo to air freight. Within this market environment, handling volumes increased year on year as a result of securing space by arranging charter flights.
In the ocean freight forwarding business, although procurement prices continued to soar, handling volumes remained firm in line with the restart of economic activities. In the logistics business, handling volumes increased mainly for general consumer goods that are in strong
demand. In the coastal transportation business, handling volumes declined on several services. As a result of the above, profit increased on higher revenue in the Logistics segment as a whole compared to the same period last year.

Bulk Shipping

In the car transportation division, although there were concerns automobile production would decline due to the shortage of semiconductor chips, finished-car volumes to mainly North America and Middle East recovered year on year to a greater extent than expected. While localized capacity shortages occurred, efforts were made to nimbly respond to customers’ transportation related requests through innovations to vessel deployment. In the auto logistics segment, while the supply and demand balance recovery varied in each country and region, efforts were made to cut costs and rationalize the businesses in countries including China, Russia and India. At the same time, advances were made toward establishing new businesses, including preparations for the construction and opening of finished car terminals in Egypt and Turkey and the start of the wind power business at the finished-car terminal in Belgium. In the dry bulk division, following the unusual rising market from March through early May on the back of strong iron ore shipments, the Capesize market entered a correction phase, but during the first quarter as a whole, market levels trended at higher than typical levels. In the Panamax segment, delayed soybean shipments from South America due to inclement weather resulted in a massive vessel backlog that caused the supply and demand balance to tighten. In addition, cargo volumes of coal picked up from June, causing markets levels to rise further. Within this market environment, along with using futures contracts to fix revenues and limit the impact of market volatility on the bottom line, efforts were made to stabilize revenue through the acquisition of long-term contracts and cut costs through efficient operations. In the energy division, the coordinated production cut by oil producing countries remained ongoing, thus prolonging the structural deterioration to the supply and demand balance. This caused the VLCC (Very Large Crude Carrier) and petrochemical tanker markets to remain at historically low levels. The VLGC (Very large LPG Carrier) market started to rise from March, but it dropped again following the start of the weak demand season in June. Although the use of short-term contracts subject to market volatility is limited in the tanker business, the greatly lower market levels year on year had a negative impact on the bottom line. In LNG carriers, the results were steady based on support from the long-term contracts that generate stable earnings. Also, in the offshore business, FPSO (Floating Production, Storage, and Offloading) and drill ships were steady. As a result of the above, the overall Bulk Shipping segment recorded a profit on increased revenue year on year.
Source: Nippon Yusen Kabushiki Kaisha (NYK Line)

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping