Japan's Nippon Yusen sees the pandemic cut its profits

Japanese shipping company Nippon Yusen KK expects the coronavirus pandemic to reduce its recurring profit by 50-60 billion yen ($464 million-$557 million) for the year to next March

The container ship NYK Venus sails on the Elbe estuary near Cuxhaven, northern Germany

Tokyo - Japanese shipping company Nippon Yusen KK expects the coronavirus pandemic to reduce its recurring profit by 50-60 billion yen ($464 million-$557 million) for the year to next March, an executive said on Monday.

“Our assumption is that the worst impact from the pandemic will be seen in the April-June quarter, with economic activity slowly picking up after that,” Toru Maruyama, a corporate officer at Nippon Yusen, told a news conference.
 
Global container demand, which is currently down more than 20%, will likely drop more than 10% for the year to next March from a year earlier amid the COVID-19 crisis, he said.
 
The company may consider selling and scrapping car carriers, depending on demand, he said, adding the transportation volume of vehicles would likely drop around 50% in the April-June period.
“The dry bulk market is facing a historic low (in terms of prices), though shipments have not declined from a year earlier,” Maruyama said. The market is expected to recover in and after the July-September quarter, but that will not be enough to compensate for the current deterioration, he said, forecasting a lower annual profit for the segment.
As for crude ships, all cruises with return dates up to late August have been cancelled, he said.
 
The company has largely secured 120 billion yen through long-term loans to pay most of the planned redemptions by the end of March, while securing a credit line of 230 billion yen from banks, he added.
 
Nippon Yusen reported a 44.5 billion yen recurring profit in the year that ended March 31, turning around from a recurring loss of 2.1 billion yen a year earlier. It forecast no recurring profit for the year to next March.
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