Kawasaki Kisen Kaisha Ltd. expects the impact of US auto tariffs to be lower than previously feared, though a stronger yen is seen shaving almost ¥10 billion ($68 million) off profit this fiscal year.
The yen appreciation will cost K-Line almost three times as much as the expected hit from US auto tariffs, Chief Financial Officer Yutaka Akutagawa said at a press conference on Monday. That’s based on a revised currency assumption of ¥141.7 per dollar from a prior estimate of ¥152.7.
At the same time, the shipper reduced the estimated tariff-related impact on its vehicle shipment business to ¥3.5 billion from the ¥13.5 billion it anticipated in May. Including the containership business, the overall anticipated tariff-linked effect was revised down by 40% to ¥18 billion.
The company said vehicle shipments stayed robust between April and June, buoyed by pre-tariff purchases. That meant it could raise its full-year operating income forecast by 12.5%, Akutagawa said, though he urged caution.
“The business environment remains uncertain,” Akutagawa added. “Geopolitical tensions in the Middle East led to persistent disruptions along the Suez Canal route and potential US policy shifts remain risks for the shipping industry at large”, he said.
First-quarter total revenue and profit dipped, which the company attributed mainly to adverse exchange rates, according to a statement on Monday.
Source: Bloomberg