ONE Lifts Profit Forecast as Longer Voyages, Strong Demand Boost Container Spot Rates

Ocean Network Express (ONE) released its financial results for its first quarter of FY2024, which spanned April to June. The company reported revenue of $4.211 billion, a 12% increase from the same quarter last year, and a net profit of $779 million, up $266 million year-over-year.

Cargo liftings in the first quarter hit 3,142,000 TEUs, up 11% compared to the same period last year and a 5% gain compared to the previous quarter. ONE attributed improved cargo movements to increased consumer spending in North America and Europe.

Despite new vessel deliveries leading to an oversupply in tonnage, prolonged rerouting around the Cape of Good Hope mitigated the oversupply. As a result, spot freight rates have risen compared to the previous quarter, particularly on trade lanes between Asia and North America, and Asia and Europe due to tight supply and increased demand.

“With a steady recovery in cargo movements as the backdrop, the supply and demand situation for shipping capacity is becoming increasingly tight. This is impacting spot freight rates which are continuing to rise,” ONE stated in its report.

For the full year forecast for FY2024, ONE revised its net profit guidance to $2.745 billion from the previously announced $1 billion on April 30.

“The outlook, especially for the second quarter and beyond, is extremely uncertain. It will also take some time for the situation in the Middle East to normalize,” said Jeremy Nixon, CEO of Ocean Network Express. “ONE will monitor evolving conditions and maintain agile and efficient operations, with a focus on delivering high-quality service to customers.”

Headquartered in Singapore, Ocean Network Express operates a fleet of over 240 vessels with a capacity exceeding 1.9 million TEUs. ONE was established through the integration of the container shipping businesses of Japanese shipping companies Kawasaki Kisen Kaisha (“K” LINE), Mitsui O.S.K. Lines (MOL), and Nippon Yusen Kaisha (NYK).

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