MOL faces biggest loss in its history

Mitsui OSK Lines president Koichi Muto this week warned that the Japanese carrier was facing the largest loss in its history.

At the shipping line’s 128th birthday celebration, he also forecast that 2012 could be just as challenging.

Muto said that for fiscal 2011, which ended on March 31, the carrier is forecasting a loss of around 27 billion yen ($325.5 million).

He said it eclipsed MOL’s previous record loss in 1993 of 5.7 billion yen ($68.7 million).

Muto blamed “a confluence of factors” that included the strong yen, high fuel prices, the impact of last year’s earthquake and tsunami and the economic slowdown.

He added: “However, the most significant factor specific to the marine transport industry was lackluster market rates, which reflected the glut of vessels on the market in almost every vessel category.

“This year, we are forecasting mostly the same amount of deliveries of new vessels as last year. Therefore, the delivery of new vessels will continue to negatively impact our operating results for some time.”

The answer, Muto said, was for costs to be “relentlessly cut”. In fiscal 2012, when a new mid-term management plan would be drawn up.

“I’m convinced there is much more room to cut costs, including cases where costs may have crept back up after previously being lowered.

“I want the entire MOL group to be determined to exercise ingenuity in trimming costs and coming up with fresh ideas,” he said.

He added that it was crucial to continue to deliver high-quality services, which he said would give the company a competitive edge.

This post is also available in: Spanish