Nippon Yusen cuts expansion plan

Nippon Yusen K.K., Japan?s largest shipping line by sales, cut its fleet expansion plan by up to 60 vessels as slowing economic growth curbs demand for transporting steelmaking commodities including coal and iron ore. The company will boost its fleet to 940 vessels by the end of March 2011, compared with an earlier plan of 1,000 ships, a company spokesman said. The company will revise its medium-term profit forecasts next year.

“Nippon Yusen can?t avoid cutting its expansion plans with the economy this bad,” said Yoshihisa Miyamoto, an analyst in Tokyo at Okasan Securities Co. “Earnings will be influenced more by the drop in transportation rates than expansion costs.”

The shipping line, which got 40% of revenue from transporting commodities last year, predicts net income of 140 billion yen ($1.5 billion) in the fiscal year ending March 31, and 145 billion yen for the next two fiscal years.

Nippon Yusen?s orders for new ships are unaffected by the expansion plan change, according to Nikkei, as the company is accelerating the retirement of old, less profitable ships. NYK said in March it plans to spend 1.4 trillion yen on 218 new ships including 132 dry-bulk ships, tankers and liquefied natural gas carriers and 39 car-carriers.