ONE Q1FY2024 net income up 52% on higher rates
ONE has more than doubled its profit forecast for FY22024 to $2.75 billion from the earlier estimate of $1 billion
Ocean Network Express (ONE) reported a 52 percent increase in profit at $779 million on higher rates for the first quarter ended June 30, 2024.
"With a steady recovery in cargo movements as the backdrop, the supply and demand situation for shipping capacity is becoming increasingly tight. This is impacting spot freight rates which are continuing to rise," says an official release.
Revenue increased 12 percent to $4.2 billion even as liftings improved 11 percent to 3.1 million TEUs.
"Cargo movements are in a recovery trend with personal consumption spending remaining strong in North America and consumer demand recovering due to easing inflation in Europe. High tonnage supply continued due to the influx of new vessels. However, the continued uncertainty surrounding the situation in the Middle East has led to longer transit routes with vessels diverting around the Cape of Good Hope (CoGH), resulting in a reversal of oversupply. This same situation has impacted container equipment availability in some areas.
"Spot freight rates increased compared to 4Q FY2023, across multiple tradelanes including Asia - North America and Asia – Europe due to tight supply and increased demand."
Outlook
ONE has more than doubled its profit forecast for FY22024 to $2.75 billion from the earlier estimate of $1 billion as supply-demand balance remains uncertain beyond Q2, the release added.
"In particular, the outlook for the 2Q and beyond is extremely uncertain. The normalisation of the Middle East 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."