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Under the global shipping crisis, the demand for container ships is strong and freight rates are soaring. According to media reports, Kawasaki Kisen, one of Japan's three largest shipping companies, was likely to post record pre-tax profits in the first half of fiscal year (ending September), about 230 billion yen ($2.02 billion), the company's best half-year performance ever.
It is reported that this will be 23 times the company's profit in the same period last year, and it is also 30 billion yen higher than the company's latest forecast. In May, Kawasaki Steamboat initially expected a pretax profit of 44 billion yen for the first half of the year, and then quickly raised guidance twice in a row. Kawasaki Steamboat is expected to announce its first-half fiscal year results on November 4.
The substantial increase in Kawasaki Steamship's profits came mainly from the container shipping business, which is operated by the company's joint venture with Nippon Yusen and Japan's Mitsui Corporation, in which Kawasaki Steamboat holds a 31 percent stake.
Demand for home caused by the pandemic has driven a surge in container ship transport, particularly between Asia and North America. The surge in transportation demand has led to congestion in North American ports, while limited shipping capacity has pushed up the market price of containers.
According to the congestion index of the container transport platform Seaexplorer, as of October 20, more than 683 ships of major carriers around the world were berthed outside the port, setting a record peak of global port congestion.
According to U.S. analytics firm Descartes Datamyne, the number of containers shipped from Asia to the U.S. hit a record high in September, surpassing the figure for the same period last year for the 15th consecutive month.
On Friday, the Shanghai Export Container Freight Index, the benchmark indicator of container freight rates, closed at 4583.39 points, up nearly 80% from the end of March.
In addition to the demand boost, the weakening of the yen also boosted Kawasaki Steamship's profits. Since the company's sales are mostly denominated in U.S. dollars, further depreciation of the yen will boost pre-tax profits.
However, the rising fuel costs caused by the current energy crisis appear to have a limited impact on Kawasaki Steamship's profitability, as Kawasaki Aircraft imposes a surcharge on most of the ships in its operations. Analysts believe the company will almost certainly raise earnings forecasts for the second half of the fiscal year.
"It's hard to believe that spot container freight rates will drop significantly." Yuichiro Tsuchi of UBS Securities said, "The maritime shipper has issued a more conservative performance forecast, so [the performance expectations] are expected to continue to correct upwards." ”
This article was taken from the Financial Associated Press
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