Ocean Network Express (ONE) has projected a USD $110 million profit for this financial year, after a difficult first quarter report revealed a net loss of $120 million.
ONE, which started trading in April 2018, was formed after Japanese ocean carriers Kawasaki Kisen Kaisha (K Line), Mitsui O.S.K. Lines (MOL), and Nippon Yusen Kabushiki Kaisha (NYK) merged their container shipping services.
All companies posted losses in Q1, which they attributed to “teething problems” following the merger.
NYK, which suffered a net loss of $40.2 million, reported that the termination of its individual liner business cost more than expected, and that an increase in bunker prices had cost the firm $89.3 million.
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Unlike NYK, MOL did not adjust its full-year forecast because of Q1 losses.
Once again, however, the transfer of its container ship business did prompt a serious decrease in revenue.
A net loss of $172.4 million meant that K Line was the biggest loser.
Even with the inefficiencies, ONE has offered a more positive outlook in the wake of the results.
Also described as “teething problems” in its report, ONE has reported that its reduced service quality will stabilize later on in the year, and that it will also aim to offset the cost of establishing itself during this time.
NYK, MOL and K Line are now able to share the overheads of terminals and transportation, which is predicted to normalize business and produce a profit from Q2 onwards.