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Sanko Steamship reports net profit decline

SANKO Steamship, Japan’s fourth largest shipping company, has reported a decline in net profit of 12.5% for the 2008/2009 fiscal year. Net profit was Y36.8bn ($376m) down 5.4% year on year. The company said its pre-tax profit of Y67.2bn put it among shipping’s top profit makers in the country, behind only Mitsui OSK Lines and Nippon Yusen Kaisha. Sanko’s tanker division effectively took up the slack created in the dry bulk sector as the latter collapsed in the second half of 2008. Operating profit fell 20.5% to Y63.4bn off of a 0.1% slide in sales at Y229.2bn. Sanko president Takeshi Matsui told local press that it expected a continuing decline in profits in 2009, but said he remained confident that the company would again record profits rather than a loss for the year. In 2009 Sanko expects something of a reversal in the relative fortunes of its tanker and dry bulk divisions as its seeks to lower its dependence on spot chartering of its bulkers, which stands at around 50%. Mr Matsui said the company had picked up time-charter contracts for 15 ships in the last three months and was looking to boost vessels under time-charter to 60%. Increased production of crude steel in China, Japan and South Korea, which should hold good for the company’s bulk fleet. Mr Matsui was less hopeful about the tanker market forecasting that there would be no rapid return in demand this year. In recent years Sanko has invested heavily in the offshore supply sector primarily in the acquisition of anchor supply vessels. It holds a fleet of 21 such vessels with a further 31 on order. Mr Matsui said the company had weathered the fall in offshore activity last year when oil prices fell steeply. Activity is again on the rise due to the partial recovery in crude prices. “I place great hopes and expectations [for offshore support] in the future,” he said. In order to capitalise on those expectations Sanko has established Sanko Ship Management in
Singapore, which has been tasked with managing its offshore vessels. The new venture will take delivery of its first vessel Sanko Baron, an anchor handling tug supply ship in July. Sanko will have a fleet of 52 offshore support vessels by 2012.

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