K Line, Mitsui O.S.K. Lines (MOL) and NYK Line, the three companies which integrated their container shipping businesses to form Ocean Network Express (ONE), have announced a revision of ONE’s full year forecast.
ONE Holdings, the holding company established following the parent companies’ consolidation, commenced business in April 2018 through its subsidiary ONE.
Despite attempts to achieve profitability in their initial year, by creating synergistic effects throughout their business integration, ONE Holdings has downgraded ONE’s first half and full year forecasts by 7.5% and 10.2% respectively.
According to K Line, MOL and NYK Line, the alterations made to ONE’s forecast will also have an impact on the forecast of each parent company.
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ONE is currently predicted to make a loss of USD $600 million after tax, which has been attributed to “teething problems” that negatively impacted revenue by causing a decrease in liftings and utilization.
A statement, regarding these operational issues, read: “Booking reception and documentation operations were delayed because ONE staff were not completely familiarized with the newly introduced IT system, and the staff were shorthanded.”
Although these initial problems have been resolved, liftings and utilization are still on their way to recovery.
Other reasons for the projected $600 million loss include an increase in bunker prices and US-China trade friction, which has affected ONE’s second half outlook.