3 Major Japan Shipping Firms Expect Sharp Profit Falls
Tokyo, May 9 (Jiji Press)--Japan's three major shipping companies expect their consolidated net profits in fiscal 2025 to plunge around 50-70 pct from the previous year, projecting a drop in transportation of automobiles and other goods due to U.S. President Donald Trump's tariff measures.
The three also expect that freight rates in the container shipping division, which has driven their earnings, will go down in the fiscal year ending in March 2026, reflecting an increase in new shipbuilding worldwide.
Net profit is forecast to fall 47.7 pct to 250 billion yen at Nippon Yusen K.K., 60 pct to 170 billion yen at Mitsui O.S.K. Lines Ltd. and 67.3 pct to 100 billion yen at Kawasaki Kisen Kaisha Ltd., according to their earnings reports released by Thursday.
Mitsui OSK Lines expects the impact of the U.S. tariff policy to push down its ordinary profit by 40 billion yen.
"The container division and the auto division will be hit considerably" by the tariff measures, Mitsui OSK Lines President Takeshi Hashimoto said in an online press conference on April 30, adding that cargo movements from China to North America will likely decrease and that auto-carrying freighters are expected to see a drop in the number of cars they ship to the United States.
Kawasaki Kisen estimates the tariffs' impact on its ordinary profit at 30 billion yen.
Nippon Yusen said the impact could be up to 100 billion yen on an ordinary profit basis, with its president, Takaya Soga, saying in an online press conference on Thursday, "There are so many variables that it is impossible to predict at this point the extent of the decline in cargo movements and the degree of economic stagnation in each country."
The U.S. administration is believed to be planning to impose port entry fees on car carriers built outside the country. If such fees are actually introduced, Mitsui OSK Lines' Hashimoto said his company plans to seek the understanding of cargo owners about passing the charges on to freight rates.
For fiscal 2024, which ended in March this year, the three companies reported increases in their sales and profits, as freight rates for container ships remained high and demand for car carriers was also solid.
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