Mitsui OSK shares jump, activist Elliott builds ‘significant’ position
A Mitsui OSK Lines (MOL) container ship at a shipping terminal in Tokyo on October 31, 2016.
Akio Kon – Bloomberg – Getty Images
Shares of Japanese shipping company Mitsui OSK Lines rose more than 11% to a record high on Wednesday, following an announcement by activist investor Elliott Investment Management. had established a “significant” stake in the company.
Elliott said he was confident in the Japanese shipping company’s long history and position as one of the world’s largest diversified ocean carrier owners.
“Despite this strong market position and high-quality assets, the market is materially undervaluing the business,” the investment firm said in a statement, adding that it sees an opportunity to engage constructively with Mitsui’s management to ensure its upcoming medium-term plan is sufficiently ambitious, improve market perception and unlock a higher valuation.
Mitsui OSK reported slightly higher revenue In the final results, but profits fell sharply, reflecting weak earnings in key shipping segments. Revenue rose 2% year-on-year to 1.35 trillion yen ($8.49 billion) in the nine months ending December, but operating profit fell more than 16% to 102.7 billion yen.
The decline was due to weak profitability in many core businesses, particularly product transportation and container ships; profits here fell sharply due to softer freight rates and increased ship supply.
The shipper’s stock is up over 48% year to date.
Elliott Investment Management manages approximately $79.8 billion in assets.
