JAPAN's third largest carrier "K" Line has announced its fiscal year 2011 results ending March 31, 2012 suffering a net loss of US$503 million against $380 million profit in 2010 due to considerable loss recorded in its container shipping business.

The world's 14th carrier experienced an operating loss of $494 million drawn on 1.3 per cent decrease in operating revenues to $11.8 billion in fiscal year 2011. Earlier, "K" Line had reported a $173 million operating loss for the last quarter of 2011 from January to March.

In container shipping, "K" Line lost $520 million against a profit of $360 million in fiscal 2010. Container revenues fell 11 per cent to $4.9 million from $5.5 billion in the previous year.

The carrier said the heavy loss was the result of "weak market conditions, a strong yen and high fuel oil prices." Last fiscal year saw the Japanese economy recover from the downturn caused by March earthquake and tsunami, but the persistent appreciation of the yen and the floods in Thailand caused a further slowdown.

It said the container market was soft and "sluggish" last year due to declining cargo shipments in the US and Europe and an increase in container capacity.

"K" Line said uncertainty remains, but the upside is that demand is expected to increase. So it expected earnings to see a "substantial improvement" this fiscal year, attributable to recent freight rate increases, cost-cutting and slow-steaming.

Shipping Gazette - Daily Shipping News