ONE expects profits in fiscal year 2019

Japanese carrier forecasts an $85m net profit in this fiscal year, having lost $586m for the previous 12 months. It is set to launch its own feeder services in Asia and Europe by the end of May.

News ID: 80373

Date: 27 April 2019 - 09:29

ONE posted a net loss of $96m in the fourth quarter ended March 31, 2019.

ONE'S TARGET TO REALISE 100% OF THE MERGER SYNERGY, WORTH $1.05BN, IN FISCAL YEAR 2020 REMAINS UNCHANGED.

OCEAN Network Express, the container shipping joint venture set up by NYK, MOL and K Line, has targeted a return to profit after suffering heavy losses.

The carrier, which suffered from serious operational disruptions when it launched its business a year ago,  it expected an $85m net profit for the year, based on a projection of 4% increase in both fleet supply and cargo demand globally.

“Liftings that dropped due to teething problems at commencement of services in FY2018 have been restored,” it said. “Profit is expected to gradually recover throughout H1, with the improved lifting, which will recover to the pre-integration level throughout FY2019.”

ONE said it had a net loss of $96m in the fourth quarter. The result pushed the company’s combined net losses for the fiscal year ended March 31 to $586m, although the shortfall is slightly better than the $594m forecast previously,

“Freight rates remained slightly higher than the assumption on Asia-North America and South America routes, while measures to enhance collection of detention and demurrage achieved higher-than-anticipated results.” said the Singapore-based carrier.

However, “liftings on some routes such as Asia-North America service did not reach the target due to lower-than-anticipated cargo demand”, ONE said.

Revenue reached $2.8bn in the three months, during which the company lifted 627,000 teu on the transpacific eastbound trade and 455,000 teu on the Asia-Europe westbound trade. But utilisation on the former trade dropped to 88% from 95% in the previous quarter, while that on the latter trade maintained the same level at 92%.

The company is set to take a series of measures this year to improve results, which include the launch of its own feeder services in Asia and Europe by the end of May.

The target of realising 100% of the merger synergy, worth $1.05bn, in fiscal year 2020 remains unchanged.

At last count, the carrier operated a fleet of 224 containerships, with a total carrying capacity of 1.55m teu.

Earlier this month, ONE chief executive Jeremy Nixon said the company would have exhaust gas cleaning systems on board  in early 2020.