Nippon Yusen K.K. and Mitsui O.S.K. Lines Ltd., Japan’s two largest shipping lines, raised their full-year earnings forecasts as demand rebounded for container shipments to the U.S. and Europe.
Nippon Yusen expects a profit of 76 billion yen ($941 billion) in the year ending March 31, compared with a previous forecast of 68 billion yen, it said in a statement today. Mitsui O.S.K. predicts operating income of 130 billion yen compared with a previous forecast of 120 billion yen.
The three Tokyo-based shipping lines all posted first-half profits after year-earlier losses because of peak-season surcharges and increased shipments of electronics and building materials to the U.S. and Europe. Consumer spending in the U.S., the world’s biggest economy, rose more than forecast in August.
“They’re doing massively better than a year ago,” said Janet Lewis, an analyst at Macquarie Capital Securities (Japan) Ltd. “Container ships are doing fantastically.”
K-Line raised its operating-profit forecast to 69 billion yen from 57 billion yen. The company and Mitsui O.S.K. left their net income forecasts unchanged.
In the half ended Sept. 30, Mitsui O.S.K. had net income of 48.3 billion yen, compared with a loss of 9.9 billion yen a year earlier. Nippon Yusen reported net income of 44.4 billion yen, from a loss of 29.4 billion yen. K-Line made a profit of 26.3 billion yen, rebounding from a loss of 43.3 billion yen.
Shipments to the U.S. from Asia rose for an eighth month in July, gaining 14 percent from a year earlier, according to figures from the Japan Maritime Center. Nippon Yusen in June said it was planning to add an extra $200 per 20-foot container on Asia-North America routes through September.
Mitsui O.S.K. fell 0.4 percent to 516 yen at the 3 p.m. close of Tokyo trading. K-Line gained 0.6 percent to 314 yen, while Nippon Yusen advanced 0.6 percent to 339 yen. Mitsui O.S.K. has risen 5.5 percent this year, trailing 19 percent gains for K-Line and Nippon Yusen.
Japanese container liners’ profit rebound has been limited by declines in the dollar against the yen. All three companies today forecast the dollar will average 80 yen in the period from October to March.
The yen today strengthened to 80.68 per dollar, from 81.03, having gained 3.4 percent this month.
Mitsui O.S.K. estimates that a 1 yen gain against the dollar would push down current profit in the six months to March by 900 million yen.