ONE Achieves 52% Increase in Net Income for Q1 FY2024, Driven by Higher Rates

For the first quarter that ended on June 30, 2024, Ocean Network Express (ONE) reported a 52 percent increase in earnings at $779 million on higher rates. "The supply and demand scenario for shipping capacity is becoming more and more constrained against the background of a sustained rebound in cargo movements. Spot freight costs are being impacted by this and are still rising, according to an official release. Even though liftings improved by 11% to 3.1 million TEUs, revenue climbed by 12% to $4.2 billion.

"Cargo movements are improving, with personal consumption expenditure maintaining strength in North America and consumer demand rebounding as inflation in Europe falls. New vessels were added to the already high tonnage supply. However, the ongoing uncertainty in the Middle East has resulted in longer transit routes, with vessels diverting around the Cape of Good Hope (CoGH), causing a reversal of oversupply. This similar scenario has had an impact on the availability of container equipment in certain places.

"Spot freight rates increased compared to 4Q FY2023, across multiple trade lanes, including Asia - North America and Asia - Europe due to tight supply and increased demand."

ONE's profit expectation for FY22024 has more than doubled to $2.75 billion from $1 billion, as the supply-demand balance remains unknown beyond Q2, according to the statement. "In particular, the picture for the second quarter and beyond is quite uncertain. The normalization of the Middle Eastern situation is expected to take some time. "ONE will monitor evolving conditions and maintain agile and efficient operations with a focus on delivering high-quality service to customers."