Ocean Network Express misses forecasts but swings back into the black
It was close but no goal for the Japanese container shipping company, Ocean Network Express (ONE), which missed its half yearly revenue forecast by $105 million. ONE also missed its profit forecast target by two million dollars. But the company has made a huge turnaround from loss to profit.
Japan’s financial year runs from April 1 to March 31, meaning Japan’s second quarter in its financial year corresponds to the third quarter in the calendar year. ONE reported its results today, October 31.
In ONE’s 2019 financial year, ONE reported $5.98 billion of revenues for the six months from April to September 2019, which is a 4.9% increase on the same time period last year. Profit stood at $126 million, which is a massive swing back into the black from the $311m loss recorded in the first six months of its 2018 financial year.
On a quarterly basis, ONE reported a year-on-year increase of five percent in its 2019 second quarter revenues to generate earnings of $3.11 billion. ONE swung from a loss of $192 million in its 2018 second quarter to a profit of $121 million in its 2019 second quarter.
Earlier this year, ONE’s 2019 first quarter revenues were just under $2.88 billion, a 39% increase on the 2018 first quarter revenues. Profit in the first quarter this year was $5 million, a substantial swingaround from the US$120 million loss ONE made in the 2018 first quarter.
Commenting on its results, ONE remarked in a statement that freight rates were below expectations for the Asia-North America trade.
ONE also noted that the Asia-Europe trade was “sluggish as there was no peak season rate hike due to [a] deteriorated supply-demand balance”.
The company said that it had reduced variable costs owing to cargo portfolio optimization and cost-saving.
Unfortunately, the company did not meet its liftings targets for the intra-Asia and Asia-North America trades. However, liftings nonetheless increased across all trades owing to “service stabilization”.
Liftings on the Asia-North America route (eastbound) stood at just over 1.44 million twenty foot equivalent units (TEUs) and utilization ran at 90%. Meanwhile, westbound liftings on the same route stood at 660,000 TEUs with a 42% utilization rate.
On the Asia-Europe route, westbound container liftings stood at 947,000 TEUs with a utilization rate of 97%. Eastbound liftings stood at 651,000 TEUs and had a utilization rate of 64%.
Founded in July 2017, Singapore-headquartered ONE is owned by K-Line, MOL and NYK. It is a member of The Alliance consortium of container shipping companies. Other members include HMM, Hapag Lloyd and Yang Ming.
According to MOL, services by ONE began in April 2018. As of June 2019, ONE operated 218 container ships including 31 vessels of, or over, 20,000 TEUs capacity.
ONE is incorporated in Japan although it is managed from Singapore.