Japan's MOL Reports 21% Rise in Annual Profit
Japanese shipping firm Mitsui OSK Line (MOL) April 30 reported a 21% yr/yr rise in net profit for the 12 months to March 31, 2020.
MOL’s net profit stood at yen 32.6bn ($300mn) as against yen 26.8bn in the previous year. “Although the global economic impact of the novel coronavirus (Covid-19) pandemic will affect the group’s profitability in the future, the impact on the group’s performance during the fiscal year under review was limited,” it said.
According to the company, the energy transport business improved from the previous year thanks to a stronger tanker market and accumulated profits from long-term contracts for LNG carriers.
“The LNG carrier division reported a year-on-year increase in ordinary profit, reflecting stable profit generated mainly through long-term charter contracts including eight newly built vessels. The offshore business division also recorded ordinary profit, brought about by steady operations of existing projects including FSRU, FPSO and subsea support vessel businesses,” MOL said.
Ordinary profit for the overall energy transport business increased 20% yr/yr to yen 25.4bn, the company added. Tokyo-based MOL is one of the largest shipping companies in the world. Its fleet includes dry cargo ships, LNG carriers, tankers, container ships, and container terminals. Its LNG tanker fleet includes the Arc-7 winterised tankers used for the Yamal LNG project in Russia's far north.
Talking about the outlook for the energy transport business for the current fiscal year, MOL said it expects very large crude oil carrier (VLCC) segment to weaken as a result of the global economic slowdown. However, it expects the LNG carrier business to remain stable.
“LNG carriers operate under long-term contracts and generate stable profits, and fluctuations in shipments and production activity will have a very limited impact on our business,” it said.
MOL said its offshore businesses have steadily generated more profit over the past few years, but given that this fiscal year marks the changeover period between the termination of a medium-term contract and the commencement of the next long-term contract for one FSRU, it expects income to drop sharply from the year-before level regardless of the impact of Covid-19.