Ocean Network Express Ltd. (ONE) has released its financial results for the second quarter of 2023, reporting a 62 per cent decline in revenue to $3.54 billion.
According to ONE, cargo movement showed some momentum in August, but lacked sustainability against the backdrop of weak general consumption and other factors.
ONE’s data conveys a 92 per cent decline in EBITA from Q1 and Q2 2022 to Q1 and Q2 2023.
The financial report also shows a 97 per cent drop in its net profit to $187 million, which is significantly lower than it was the same period last year.
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In Europe, ONE witnessed a gradual recovery trend from the decline in demand caused by high inflation, however it did not lead to a full-fledged recovery in cargo movement.
On East-West routes, tonnage increased due to the addition of newly built vessels, although blank sailings and service rationalisation were implemented.
The above factors are what ONE believes softened the supply and demand balance, particularly on East-West routes resulting in stagnant freight levels.
Cargo movements from Asia to North America during July-September fell by 7.5 per cent year-on-year (YoY).
READ: ONE posts $11 billion profit – but declining demand hits income forecast
Cargo movement temporarily picked up in the peak season, but the speed of inventory adjustment was slow and sales of general consumer goods stagnated which resulted in sluggish growth.
ONE implemented several measures aimed at increasing profitability and reducing vessel idling times caused by blank sailings, including optimising tonnage deployment in each trade by deploying newly built vessels, lowering bunker consumption through slow steaming, and optimising cargo mix in each trade.
In August, ONE revealed its financial results for the first quarter of this year.
