JAPAN’S NYK Group saw profits fall for all major divisions in fiscal 2023 (ending 31 March 2024) but revenues and net profit came in as the third highest ever achieved.

Profit levels ended up higher than the previous forecast (announced in February 2024) primarily impacted by rising container shipping market conditions during the fourth quarter, “demonstrating that we are steadily strengthening profitability as special factors such as logistics disruptions during the pandemic faded away”, NYK said.

Group revenues were JPY2,387.2 billion (down JPY228.8 billion) while net income was JPY228.6 billion (down JPY783.9 billion). NYK notes this is in comparison with the record year for both, 2022.

Recurring profit by segment (year-on-year comparison):

Liner Trade: JPY67.8 billion (down JPY722.7 billion)
• Markets fell on weak cargo demand affected by higher interest rates and inflation mainly in Europe and North America as well as increased shipping capacity following the completion of new vessels.
• Freight rates rose in the fourth quarter caused by the situation in the Red Sea, but remained low on a full-year basis.
• At terminals overseas, the handling volume decreased year-on-year due to the sale of shares of an affiliate at a terminal on the west coast of North America at the end of September 2023 as well as weak cargo movement.

Air Cargo: JPY5.7 billion (down JPY55.7 billion)
• Despite a temporary recovery of demand from mid-September to mid-December, demand throughout the year remained weak.
• The increased supply of space following the resumption of international passenger flights caused freight rates to decline year-on-year.

Logistics: JPY25.9 billion (down JPY28.3 billion)
• Air freight & Ocean freight: Markets fell on weak cargo volumes, and both handling volumes and profit significantly declined over the previous fiscal year.
• Contract logistics: Business was steady on support from cargo traffic in the e-commerce and automotive industries within Europe and firm demand for general consumer goods within North America.

Bulk Shipping: JPY170.2 billion (down JPY40.1 billion)

Automotive:
• Supply and demand conditions were tight due to the conflict in the Middle East as well as the robust transportation demand combined with port congestion and Panama Canal transit restrictions. Transportation volumes increased year-on-year by increasing vessel utilization.

Dry Bulk:
• The Capesize market levels ended up higher than those for the previous year, driven by the strong second half conditions.
• In the Panamax and smaller segments, although shipment volumes were firm, but market conditions throughout the year trended below the high levels last year.

Energy:
• VLCC: Markets recovered because of an increase in exports from the Americas during Q3, a period of typically strong demand.
• VLGC: Markets improved as supply and demand for space tightened due to an increase in long-distance shipments.
• LNG carrier: Business remained steady on support from the long-term contracts