Japan’s NYK Line is set to report record profits this year, according to company president Hitoshi Nagasawa.
In his New Year’s message Nagasawa said that for the current fiscal year, running to the end of March 2023, the company expects both reoccurring profit and net profit will be in excess of ¥1trn ($7.4bn).
The annual profit will “break the previous year’s record high,” he said.
He said NYK Line group companies Ocean Network Express (ONE), Yusen Logistics and Nippon Cargo Airlines — as well as the company's dry bulk sector — “have secured significant revenue.”
However, looking forward to the following financial year, starting in April, he said the war in Ukraine, inflation and a reversal in fortunes in the liner markets could make it a “challenging year”.
“The prolonged impact of Covid-19, soaring energy prices, inflation worldwide, and the following monetary squeeze triggered by the Russia-Ukraine conflict are causing concern about an economic recession,” Nagasawa said.
“With consumer spending slumping in Europe and other parts of the world, ONE, a major driver of earnings, is facing a tidal wave in its business environment. I predict the NYK Group as a whole will face a challenging year.”
Structural reform
Nagasawa said NYK Line has been preparing for a possible downturn by taking measures including a structural reform of its dry bulk business and the introduction of cost-cutting measures.
He said the company is set to announce a new medium-term management plan which will focus on developing ESG policies and capital management.
He said the company’s improved financial position put it in a position to make aggressive investment.
He said capital expenditure will target profitable areas related to sustainability, including offshore wind energy, autonomous ships operation and logistics.
“We need a robust capital policy, emphasising profit returns to our shareholders. We will demonstrate this in our new medium-term management plan,” Nagasawa said.
Nagasawa will step down as president this year to be replaced by current senior managing executive officer Takaya Soga. Nagasawa will then take on the role of company chairman.
