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One reports profit slump in line business

The Japanese liner shipping company One reports a drop in profits in the past quarter. The carrier also has a rather gloomy outlook.

The Japanese liner shipping company Ocean Network Express (One), whose financial year only began in April, only just managed to stay in the black in the second quarter. [ds_preview]

Net profit fell from 5.5 billion dollars to just 187 million dollars. One cites weak demand and stagnating freight rates as the reason for this. Contrary to expectations, the so-called “peak season” did not bring the hoped-for upturn either. This corresponds to a slump of around 97%. All major competitors such as Maersk, CMA CGM and Hapag-Lloyd had previously presented similar figures.

Compared to the same period last year, turnover fell somewhat less drastically by 62% to USD 3.5 billion. One CEO Jeremy Nixon is also rather pessimistic about the outlook for the rest of the financial year until March 2024. The freight market remains weak and will at best recover gradually. At the same time, the numerous new ships being built are increasing the pressure on supply.

One expects tough times ahead

“The global economy continues to face headwinds due to high inflation, interest rates and energy costs,” says Nixon. The Singapore-based shipping company expects a profit after tax of 851 million dollars. In the previous year, the company was able to post a profit of just under $15 billion. Revenue could therefore halve to USD 14.8 billion (2022/23: USD 29.2 billion).

One, the world’s No. 6 liner shipping company, operates together with Hapag-Lloyd, HMM (Korea) and Yang Ming (Taiwan) in “THE Alliance”, the smallest of the three global container alliances. Initial adjustments to the liner network have already been announced. Two important East-West trades, one in the Pacific (EC4) and one on the route between the Far East and Europe (FE5), will be suspended until further notice. This affects around 20 ships with capacities of up to 14,000 TEU. In addition, individual departures will be flexibly canceled if the markets so require, according to Nixon.

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