Japanese shipping company Mitsui OSK Lines has presented its annual update on activities, praising the role of the LNG fleet as it cemented its position as the world’s third-largest shipping group behind Japan’s NYK Line and the giant Chinese company COSCO Shipping.
The overview from President and Chief Executive Takeshi Hashimoto was contained in the updated presentation called “Blue Action 2035”, involving an initial first phase of 1.2 trillion yen ($8 billion) in investments.
“To date, the group has worked to strengthen its LNG carrier business and offshore business to increase the ratio of stable earnings,” Hashimoto explained.
“In particular, MOL’s LNG carrier business has grown to become one of the world’s leading businesses in terms of both scale and competitiveness,” he added.
Long-term contracts
“Furthermore, the group intends to increase the asset allocation to areas within the shipping industry where long-term contracts can be obtained, such as crude oil carriers and liquefied petroleum gas carriers, as well as to businesses different from industrial cargo transport, such as domestic ferries and cruise ships, and to land-based businesses such as real estate property and warehouses,” the CEO explained.
“We aim for the best mix of businesses that can resist recession, maintain stable dividends, and enjoy large profits when market conditions are favorable, by striking a good balance between market driven businesses such as containerships, which offer high returns but also large fluctuations in earnings and stable revenue businesses such as LNG carriers and real estate,” Hashimoto declared.
“The opportunity to enjoy unexpected profits over a long period can be said to be an attractive feature of the shipping business,” said the CEO.
“On the other hand, however, considering the huge capital investment required for consistent fleet renewal to continue the business, the company cannot solely rely on this irregular economic boom,” he added.
Hashimoto stated that while the shipping business would continue to be the core of the group and a source of “competitive advantage that generates high returns during market boom” MOL would also be looking to diversify and invest in other businesses to help stabilize the earnings base.
LNG stability
MOL said that LNG continued to be a “stable revenue business” while containerships was a “market driven business” along with the car-carrier fleet.
MOL said it was currently the third-largest global shipping company with a fleet of799 vessels, just behind Japan’s NYK Line with 800-plus vessels, though well behind Chinas COSCO Shipping with around 1,300 vessels
Hashimoto noted thatLNG shipping was rapidly increasing around the world as an environmentally friendly and clean energy source.
“Since first participating in LNG transport in 1983, we have accumulated considerable expertise in this field, and boast the world’s leading share in the ownership, management, and operation of LNG carriers,” he stated.
In what it called its “energy business fleet”, MOL currently has 367 vessels operating, including 158 tankers for oil and other products and 94 LNG carriers and more than 30 other gas carriers including floating storage and regasification units, ethane carriers and LNG bunkering vessels.
“We have also entered the business of transporting ammonia, which is attracting attention as a next-generation clean fuel that does not emit CO2 when burned,” noted Hashimoto.
