Mitsui O.S.K Lines Ltd – Company Strategy & Performance Analysis

Mitsui O.S.K. Lines, Ltd. (MOL) is a leading Japanese transportation company engaged in shipping services. The group offers its services through tankers and containers and provides ship management and leisure cruise services.

The group primarily operates its business through four business divisions: bulkships, containerships, associated businesses, and ferry and domestic transport. In addition, MOL operates other businesses. With regard to geographic location, MOL classifies its operations into five segments, namely Japan, Asia (excluding Japan), Europe, North America, and others. It primarily operates in Japan and other parts of Asia, with headquarters in Tokyo.

MarketLine Premium’s company strategy reports provide in-depth coverage of the performance and strategies of the world’s leading transport and logistics companies. The report details company operations in key geographies and offers a comprehensive analysis of each firm’s growth strategy and financial performance. The reports benchmark company performance via key indicators, including air freight revenue, sea freight revenue, air freight volume, sea freight volume, operating income, net income, Total revenue.

Key Highlights

Economic slowdown affected revenue of the bulkships segment

The bulkships segment consists of dry bulkers, tankers, LNG carriers/offshore businesses, and car carriers. Revenue of the segment decreased at 1.3% from US$6,930.5m in FY2015 to US$6,838.1m in FY2016. In actual currency, it declined at 11.3%. This was primarily due to poor supply and demand, attributed to the completion of new vessels. Moreover, the product tanker market declined due to sluggish freight movements for products such as vegetable oil. The car carriers division was weakened as the transportation of finished cars to resource-producing and emerging countries reduced due to economic slowdown amid low resource prices.

Lower freight rates led revenue of the containerships segment to decline

The containerships segment’s business line includes owning and operating containerships, air and sea forwarding, land transport, warehousing services, container terminals, and total logistics solution services for the transport of heavy goods. Revenue of the containerships segment declined at 4.0%, from US$5,940.9m in FY2015 to US$5,702.8m in FY2016. In actual currency, revenue declined at 13.7%. The decline was primarily attributed to low freight rates. In Q1 2017, the spot freight market on Asian-North American routes declined to record low price levels due to the impact of stagnation in the spot freight rate in FY2015.

Natural disasters affected the ferries & coastal RoRo ships segment’s revenue

The revenue of ferries & coastal RoRo ships segment declined at 5.8% from US$409.9m in FY2015 to US$386.2m in FY2016. However, in actual currency, revenue declined at 15.3%. This is due to the impact of the Kumamoto earthquakes on passenger services, along with sailing cancellations due to typhoons, mainly in Hokkaido.

Scope

– Company Snapshot – Details key indicators and rankings of Mitsui in terms of revenue, air freight volume, ocean containers and total warehouse space.

– Company SWOT Analysis – Outlines Mitsui's strengths, weaknesses, and opportunities and threats facing the company.

– Growth Strategies – Provides an overview of Mitsui’s corporate goals and strategic initiatives and evaluates their outcomes.

– Company Performance and Competitive Landscape – Analyses the company’s performance by geographical segment and provides a peer comparison on parameters such as revenue and market share.

– Key Developments – Showcases Mitsui's recent corporate events and initiatives.

– ICT Spending Prediction – Details how the company allocates its ICT budget across the core areas of its business, specifically hardware, software, IT services, communications and consulting.

Reasons to buy

- How does Mitsui ranks among its peers in terms of revenue and market share?

- What are Mitsui's main growth strategies and how successful has the company been at implementing them?

- How has the company performed since 2014?

- How has Mitsui performed in comparison to its main competitors?

- What are Mitsui’s strengths and weaknesses and what are the opportunities and threats it faces?

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