It cost Japanese carrier NYK more than expected to merge its container division with the ONE alliance, prompting the carrier to downgrade its H1 forecast and its annual forecast for the 2018/2019 financial year.
In a press release, the carrier writes that in the first half from April to September 2018, it anticipates a loss on operations of JPY 7.5 billion (USD 67.7 million).
In its forecast for the full year, which ends in March 2019, NYK has forecast a JPY 2 billion profit (USD 18 million). However, this is a significant downgrade from a previous forecast of JPY 37 billion profit.
"Following the launch of Ocean Network Express Pte. Ltd., the container shipping line jointly established by the three major Japanese shipping lines, NYK Line’s liner business has been terminated. However, the one-off cost required for the termination of the business has been discovered to be higher than initially projected for the interim period as an operating loss," writes NYK in a press release.
The company has also had to suspend its entire operation of aviation transport in order to confirm the company's planes are air worthy. Currently there are only two planes in service, while the others will return to service when their status is confirmed.
"In light of these events, the cumulative results through the interim and the full year consolidated forecast for the fiscal year ending in March 2019 have been revised downward," writes NYK.
English Edit: Lena Rutkowski