Japan’s largest shipping line, Nippon Yusen KK, has announced a record $1.9 billion loss for Q2 2016 as it writes down the value of its assets, reported Bloomberg.
The one-time write down reflects the loss of value in shipping assets caused by the ongoing overcapacity in the industry and the impact this is having on freight rates.
Nippon Yusen’s shares have fallen by more than 30% so far in 2016, almost three times the average on the Japanese Nikkei 225 stock exchange. However, the company’s shares rose 4.6% on the announcement on October 7.
Kouichi Kitamura, a spokesman for Nippon Yusen, told Bloomberg: “A recovery in rates is taking longer than expected…so, we decided to book a loss.”
The company’s announcement is the latest sign of trouble in the weakening global shipping industry, after Zim restructured its debts earlier in the week and the collapse of the Hanjin Shipping Line at the end of August, 2016.