ONE posted a profit of 4 billion USD in Q2 and expected to reach 12 billion USD in profit in 2021

ONE posted a profit of $4.2 billion for the second quarter, and $6.76 billion for the first half; along with that is forecasted an additional profit of 5 billion USD for the second half of the year.

A container vessel of ONE LINE

A container ship of ONE (Photo: One Line)

ONE (Ocean Network Express) - the Japanese shipping line - said it now expects a net profit of nearly $12 billion for the fiscal year ending March 31, 2022, after posting a profit of 3.5 billion USD in the previous year.

ONE posted a profit of $4.2 billion for the second quarter, and a result of $6.76 billion for the first half of the year, but said that while commodity demand remains strong, it expects to suffered a "volume decrease" during the Lunar New Year holiday and forecast a profit of $5 billion for the second half of the year.

Revenue for the second quarter was $7.6 billion, up 125% year-over-year, from a mere 4% increase in volume, to 3.2 million TEUs, with an average freight rate of $2,375 per TEU. This rate has increased a lot compared to the previous price of 1,032 USD per TEU.

In addition to fuel costs, which increased 65 percent from the previous quarter, to $509 a ton, ONE said its operating costs had increased "due to faster vessel speeds."

Interestingly, ONE's average price for the quarter was almost exactly equal to OOCL's $2,383 per TEU, revealed in the Hong Kong-based carrier's performance update.

Average rates seem low, as market rates are only high on some routes. They do, however, reflect relatively low rates on backhaul, intra-Asia and other less profitable routes, along with extremely profitable routes from Asia to Europe and Asia to North America. America.

Shipping lines are gradually fulfilling their contractual commitments at relatively low freight rates and replacing them with longer-term agreements at much higher rates. Along with that, short-term business activities are still maintained at a high level, are trading according to their profit results.

Accordingly, even a forecast of $150 billion in profits in 2021 - which was recently raised by maritime consultant Drewry - could still sound cautious.

Accounting for 32% of ONE's business, the trans-Pacific service remains its main shipping route, followed by Asia-Europe, 24%, and intra-Asia, 21%,

In the second quarter, ONE shipped 649,000 TEUs on the Asia-North America service, 15% less than the previous year, due to port congestion at the central ports of Los Angeles and Long Beach.

In contrast, on the Asia-Europe route, the carrier increased its output by 6%, to 443,000 TEUs.

“Like our industry competitors, we could have carried even more freight had we not been forced to blank so many Asia sailings, due to gaps in the schedule resulting from heavily delayed vessels returning from overseas destinations,” said ONE CEO Jeremy Nixon.

"As things stand, we see no major improvement in the current situation, particularly in North America," he added.

ONE's fleet currently has 217 vessels, with a total capacity of 1.6 million TEUs, of which 55% are charter ships, ranking sixth in the world shipping lines ranking, ranked above Evergreen. However, there was a much larger orderbook, 81 ships with a capacity of 661,000 TEU, compared with ONE's 24 ships with a capacity of 322,000 TEU.

And the scarcity of container ships in the charter market is holding back the Japanese shipping company's growth potential.

“The charter market for container vessels is sold out, and so the ability to augment our core fleet in the immediate short-term is constrained,” said Mr. Nixon.

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Source: Phaata.com (According to The Loadstar)

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