MOL faces biggest loss in history, says CEO in gloomy birthday speech

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MITSUI OSK Lines is facing its largest loss in history of JPY27 billion (US$0.32 billion) despite stable profits and cost-cutting the company has fallen into the red, said its president Koichi Muto at a 128th anniversary speech.

Factors such as the strong yen, high fuel prices, the impact of the earthquake and tsunami last year, and the economic slowdown in developed countries have weighed heavily on our performance, Mr Muto said, adding that the situation was also worsened by weak rates brought about by a glut of ships in almost every vessel category.

The delivery of new vessels will continue to negatively impact its operating results this year and unless cargo demand increases. It forecasts challenging market conditions into 2012 but a more favourable supply-demand balance for global fleet into 2013.

Despite a cost-cutting operation of JPY20 billion through the introduction of slow steaming the carrier is seeking further cost cuts if those that crept up without a loss to safe and high-quality services.

MOL is currently executing Phase 4 of its action plans for the reinforcement of operational safety, with the aim of becoming the world leader in safe operations to improve key performance indicators such as the accident rate.

MOL is investigating the cause of the collision of a MOL containership on the open seas southeast of Hong Kong on February 22 and stress the safety of seafarers, cargo and ships.

In order to manage the volatile market it has created a mid-term management plan in "GEAR UP! MOL" to create an earnings model unlike its traditional model-one that is resilient to drops in rates. It is also seeking to expand alliances in containerships and through pooling arrangements for tankers. It will focus on the LNG carrier business and energy-related marine business generated from it such as Floating Storage and Regasification Units (FSRUs).

Source Shipping Gazette - Daily Shipping News

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