MOL's Fiscal '08 Profit Plunges a Third
MOL"s full-year profit dropped by a third in its fiscal year ended March 31 even though its total revenue declined by only 4.1 percent.
The second-largest Japanese shipping line attributed the drop in its profits to the deterioration of the world economy in the second half of its fiscal year, combined with continuing high bunker fuel prices and a strong yen.
MOL posted a profit of $1.3 billion, compared to $1.9 billion in fiscal 2007.
Fiscal 2008 revenue totaled $18 billion, compared to $20 billion in fiscal 2007.
MOL"s container division posted an operating loss of $241 million as container revenue dropped 6.9 percent to $6.6 billion.
The carrier said freight rates on all trade dropped during the year as volumes declined and competition increased. It laid up surplus vessels to reduce capacity and offset the fall in the trade.
MOL said its car carrier business experienced strong trade in the first half of the year, with a constant shortage of vessels. But the trade collapsed in the second half and vehicle sales plummeted and automakers cut production, creating a surplus of vessel capacity. Despite the sale of older vessels and return of aged charter vessels, profits took a hit and were lower than in the previous year.
In the terminal business, MOL opened its third container terminal in North America in Jacksonville, Fla., in January and signed a contract to invest in a new container terminal in Vietnam. But MOL said the division"s operating income fell below that of the previous year as cargo traffic declined in response to the global economic downturn.