Japanese ocean carrier ONE has reported a record net profit of $16.8 billion for its financial year ending 31 March – but for the full-year 2022, its outlook is beset with uncertainties. Overall, liftings were flat, at 12.1 million TEUs, mainly due to port congestion on the US west coast, which saw volumes from Asia to North America plunge by 412,000 TEUs, to 2.35 million TEUs. However, this reduction in liftings on the transpacific was mitigated by increased carryings on other trades, including 156,000 more TEUs on the headhaul Asia to Europe routes, to reach 1.71 million TEUs. ONE‘s revenue soared by 109 per cent on the previous year, to $30.1 billion, for an average rate of $2,495 per TEU, on the back of continued high spot rates and “significant” increases in its long-term contracts. This produced an EBIT (Earnings before interest and taxes) of $17.2 billion and a net profit of $16.8 billion, compared with a net of $3.5 billion for the previous year.
“Despite the impact of seasonal factors, including the Chinese New Year, Russia-Ukraine hostilities and China’s recent lockdown, the strong cargo demand continued through January to March,” said ONE. CEO Jeremy Nixon lauded the performance, particularly the fact that the carrier’s EBIT margin was “ahead of its competitor industry pier group”. Nevertheless, he was less bullish on the outlook, saying: “It remains cautious, as there are still many trading uncertainties ahead in addition to further expected economic headwinds.” He also expressed concern regarding cost increases, which, for example, saw ONE’s average bunker price soar 54 per cent during the period, to $512/ tonne. “Additionally, there is still a strong need for further investment in decarbonization and digitalization over the course of 2022 and beyond,” said Mr. Nixon.
ONE said it was “extremely difficult to announce a reasonable business forecast for the coming financial year” and that its forecasts were “yet to be finalized”.
However, MOL, a 30 per cent equity holder in ONE, along with Japanese shipping compatriots K Line (30 per cent) and NYK (40 per cent), has decided to downgrade its projected earnings from the container line by a third, in its group accounts released at the same time. This would suggest a net profit forecast for ONE of $11.2 billion for its 2022 financial year.
MOL said it was “anticipating a downturn in the global economy, leading to weak cargo movement associated with globally accelerating inflation and materialising geopolitical risks”. As a consequence, it said, it was “expecting a decrease in profit following the previous year’s record high”. The carrier said: “Cargo movement and freight markets, which are currently strong, are both expected to weaken after the second half, associated with the deceleration of the world economy and easing of supply chain disruption.”
ONE is currently the sixth- biggest carrier by capacity, according to Alphaliner data, with 1,510,621 TEUs on 206 ships, just ahead of Taiwanese carrier Evergreen, with its fleet capacity of 1,509,654 TEUs. Moreover, the Taiwanese line has the second-largest carrier orderbook, with 65 ships for 627,196 TEUs, compared with ONE’s more modest orders for 327,000 TEUs on 24 vessels.