Japanese shipping giant K Line is reviewing its profit forecast for the current fiscal year after a better-than-expected performance from liner joint venture Ocean Network Express (ONE).
K Line said its profit review is taking place “in the view of the possibility of an upward revision of the forecast”.
K Line said that ONE’s financial performance had exceeded its expectations when it made its forecast in November, because of favourable market conditions in the liner markets.
In the third quarter, between October and December, K Line currently forecasts recurring profits in excess of ¥40bn ($385m) and cumulative results in excess of ¥60bn for the period.
“The market conditions for containership business are expected to remain favourable for a certain period of time, and the forecasts for the current fiscal year are expected to be revised upward,” K Line said.
K Line is one of three Japanese shareholders in ONE, along with compatriot shipping giants NYK Line and Mitsui OSK Lines.
On the back of a boom in the liner business, ONE reported a $682m net profit in the first half of the current fiscal year.
The operator has since embarked on a massive newbuilding project to build ultra-large containerships.
It will charter in six 24,000-teu boxship newbuildings for 15 years. The vessels are to be built at Imabari Shipbuilding and Japan Marine United and owned by Imabari subsidiary Shoei Kisen.
ONE will take delivery of the ships in 2023 and 2024.
The price of the newbuildings has not been disclosed, but sources valued the newbuilding deal at close to $1bn in total.
