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Japan’s NYK, MOL and K Line all improved profitability in the first quarter of their fiscal year (ending 31 March 2016), mainly due to the benefits of a 42% decline in the price of bunker fuel and a 15% drop in the value of the Japanese yen versus the US dollar.

The largest of the shipping trio, NYK, reported a massive 321% increase in its net income for the period, compared with Q1 2014, to ¥43bn ($350m), but this included an element of booked gain from the $550m sale of Crystal Cruises to Hong Kong’s Genting.

Drilling down into its business segments, NYK’s container division performed surprisingly well, contributing ¥3.9bn against a negative ¥100m in the first quarter of 2014.

The company said that its Asia-North America trade increased in “comparatively robust conditions”, albeit demand declined and spot rates fell to “historically low levels” between Asia and Europe, resulting in a “challenging business environment”.

In addition to the low fuel prices, NYK credited improved fleet efficiency to the policy of cutting uneconomical container vessels and deploying bigger ships to reduce unit costs.

The Loadstar’s financial analyst, Alessandro Pasetti, has been critical of NYK for its strategy and lack of transparency in its accounts. He wrote in June: “Not only is its asset base too diverse, but its financials are complex.”

Meanwhile, MOL also improved its net profit in Q1, compared with the same period of the previous year, to ¥12.7bn ($104.4m), from ¥8.5bn, although its troublesome container business stayed in the red, losing ¥5bn versus the ¥7.2bn loss recorded a year earlier.

MOL said that cargo volumes on Asia to Europe routes had “declined considerably”, while the supply/demand gap “expanded due to the deliveries of large vessels”.

It added that freight markets on Asia-South America and intra-Asia routes “also slumped”, although cargo volumes on transpacific routes “were firm”.

MOL said it had endeavoured to compensate for weak markets by cancelling sailings and implementing more slow-steaming. This radical cost-cutting was in evidence recently through its short notice withdrawal from the Europe-West Africa trade, which it operated with Hapag-Lloyd.

Like NYK, K Line managed to keep its container business in the black during the period, with it contributing ¥4.1bn to the company’s ¥10.2bn ($83m) net profit, compared with ¥2.2bn and ¥4.3bn in Q1 2014.

K Line described the freight rate market for Asia-Europe and Asia- South America as “dull”, blaming the increased delivery of “new large-sized vessels” for the malaise. The carrier recorded a substantial 11% year-on-year drop in its Asia-Europe cargo volumes, but in contrast increased its Asia to US carryings by an impressive 9%.

K Line enjoyed the benefit from a recovery in the oil tanker market in the quarter and said that, despite many other negative factors, its ongoing cost savings, the yen’s further depreciation and the decline in fuel prices had assisted its improved financial position.

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