ONE returns to black in the first quarter

Japanese carrier has reported $5m profits for the first quarter of fiscal year 2019 ended June 30, compared to a loss of $120m during the year-ago period. It is also installing scrubbers on some of its larger vessels, targeting the industry’s average installation rate as the benchmark.

News ID: 80414

Date: 31 July 2019 - 12:34

ONE OPERATES A FLEET OF 224 CONTAINERSHIPS, WITH A TOTAL CARRYING CAPACITY OF 1.55M TEU.

OCEAN Network Express has recorded its first profitable quarter since the Singapore-based container shipping line launched its business in April 2018.

The company - a joint venture set up by Japan’s NYK, MOL and K Line - posted a profit of $5m for the first quarter of fiscal year 2019 ended June 30, compared to a loss of $120m during the year-ago period.

The carrier reported $586m losses for the previous fiscal year, affected by a lack of staff and technical issues during its start-up period.

“Profitability improved thanks to reduction in unit variable costs such as terminal and inland costs, due to improved portfolio and efforts on cost reduction,” said the carrier in a results presentation.

It added that long-term contracts for transpacific trade had been negotiated upon “scrutiny of profitability” for this fiscal year and hence were concluded on target level.

Revenue also increased 39.1% year-on-year to $2.9bn, with improvement seen in both liftings and load factors from the previous corresponding period.

Headhaul volume in transpacific and Asia-Europe trades expanded 26.2% and 43.3%, respectively, in the first quarter to 669,000 teu and 460,000 teu, while utilisation improved to 86% and 87% from 73% on both trades.

ONE has revised its forecast of profit for this fiscal year to $90m from $85m predicted previously to reflect the stronger than expected performance in the first quarter.

Meanwhile, as the 2020 sulphur rules are approaching, the company said it was preparing to install scrubbers on some of its larger vessels, targeting the industry’s average installation rate as the benchmark.

Alphaliner earlier estimated that about 16% of the global containership fleet by vessel number, or 35.7% by carrying capacity, would be equipped with scrubbers as at end-May, 2019, with the proportion continuing to climb in the run-up to the sulphur cap.

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