MOL announces recording of extraordinary loss
Mitsui O.S.K. Lines., Ltd. has announced the recording of an extraordinary loss and a revision of the forecast for extraordinary loss for fiscal year (FY) 2016 (April 1, 2016 to March 3 1, 2017), the company said in its press release.
The containership business continues to show low profitability while the spot freight rate market remains at low levels despite showing an imp rovement to a certain extent, and MOL sees an indicator of impairment on fixed as sets for said business, such as vessels. As a result, an impairment loss of ¥20.5 billion will be recorded as an extraordinary loss for the fourth quarter of FY2016, after reviewing the recoverability from said fixed assets.
Meanwhile, MOL recorded an impairment loss on the containership business for the previous fiscal year ended on March 31, 2016. However, the impairment loss recorded this time is based on the recoverable amount calculated in consideration of the subsequently continuing decline in containership market prices.
MOL projected net income in its consolidated business outlook for FY2016, which was announced on January 31, 2017, considering the possibility of the above-mentioned extraordinary loss. As a part of the Business Structural Reforms in the dry bulker business, MOL’s consolidated subsidiary MOL Bulk Carrier Pte. Ltd. (MOLBC) in Singapore suspended business as of September 30, 2016. Prior to the suspension, MOLBC canceled some charter-in contracts for its operated vessels and transferred the remaining charter-in contracts to MOL.
The projected loss caused by the cancellation and transfer of charter-in contracts by MOLBC is increased by ¥6.9 billion.
