Alphaliner: Ocean Network Express generates record USD 5.5 bn in net profit
but quarterly earnings set to drop sharply
Ocean Network Express generates record USD 5.5 bn in net profit but quarterly earnings set to drop sharply
Japanese carrier ONE reported a net profit of USD 5.52 bn for the third quarter – its best ever bottom-line result – but warned profits for the next half-year would come in 60% lower than the six months just passed.
With revenues of USD 9.36 bn in the third quarter, ONE reached record levels of net profit and revenue in the period, while EBIT (earnings before tax and interest) were just slightly lower (0.07%) than the previous quarter, at USD 5.53 bn.
ONE said cargo movements had remained firm in July although there had been a sudden demand decline in August and September.
Freight rates remained higher year-on-year, supporting profits. But ONE warned that its net profit for the 2022 Japanese fiscal year (April 2022-March 2023) would come in at USD 15,27 bn, down 9% from the USD 16.75 bn recorded in the 2021 fiscal year.
Meanwhile, second-half fiscal 2022 net earnings were expected to reach just USD 4.25 bn, due to declining demand and the deteriorating freight market. This compares to net earnings of USD 11.02 bn in the first half of the year.
The line said inventory build-up in North America and Europe’s entry into recession would mean some time was needed to see a recovery in cargo movements and freight rates. Expenses are also rising as inflation impacts cargo handling and inland transport costs.
This is expected to eat into revenues, returning less profit per dollar earned.
ONE’s liftings dropped from 2,939,000 in Q2 to 2,898,000 teu in Q3.
Asia-North American eastbound freight rates increased slightly versus the previous quarter, while Asia-Europe westbound rates fell slightly.