Ocean Network Express (ONE) has reported a decrease in earnings for the financial year 2022 amidst uncertain market conditions
From April 2022 to March 2023, the carrier saw a 10 per cent decrease in its yearly profit, falling to approximately $14.9 billion – a decrease by $1.7 billion from the previous year.
ONE’s revenue also fell by 3 per cent to $29.2 billion, with EBITDA and EBIT declining 11 per cent and 13 per cent, respectively.
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The company attributed the decline in demand to a high goods inventory ratio in the US and falling consumption in Europe due to rising inflation.
The decrease in demand, particularly from Asia to North America and Europe, was reinforced in July 2022, resulting in a significant year-on-year reduction in cargo volume, reported ONE.
Specifically, cargo volume from Asia to North America fell by 24.5 per cent, while that to Europe dropped by 12.9 per cent in January.
Despite a slight decline in US retail inventories in January-February, the expected increase in US imports did not materialise, according to ONE, and retail consumption did not recover significantly, despite the positive trends in energy prices and inflation.
The normalisation of port congestion led to an improvement in vessel capacity, which allayed concerns about the scheduled delivery of numerous new vessels potentially creating excess tonnage. However, labour negotiations at the US West Coast ports remained unsolved.
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Turning to containers volumes, ONE moved fewer boxes with the overall container volume of the company falling by 8 per cent to 11 million TEU.
The containership market is currently experiencing major changes following the COVID-19 pandemic, including the aftermath of global supply chain disruption, changes in consumer behaviour, and shifts in trade patterns due to increasing international tensions.
ONE said it is making progress in adapting to these changes, but the market is expected to continue evolving, creating an uncertain outlook that is difficult to predict.
As a result, ONE noted that “it is extremely difficult to announce a reasonable business forecast at this time,” and its full-year forecast for FY2023 is yet to be determined.
Earlier this month, ONE announced the launch of the ONE Eco Calculator, which calculates carbon dioxide (CO2) emissions from its operating vessels.