ONE Q2 net profit up 31% at $5.5bn

Ocean Network Express (ONE) reported a 31 percent increase in net profit at $5.5 billion for Q2FY2022 and 24 percent increase in revenue to $9.4 billion on higher average freight rates and lower (9 percent) liftings at 2.9 million TEUs.

"The lifting on Asia-North America E/B remain unchanged from Q1 FY2022 but decreased in comparison to the same period of last year. Vessel utilisation decreased due to higher service frequencies following a reduction in port congestion on the U.S. West Coast. Both lifting and vessel utilisation on Asia-Europe W/B remain unchanged from Q1 FY2022 but decreased in comparison to the same period of the previous year."

While revenue increased 38 percent for H12022 to $18.4 billion, profit was up 63 percent to $11 billion, says an official release.

While ships' costs increased, bunker consumption decreased due to a reduction in the number of operating vessels and continued port congestion resulting in a similar expenditure level as the same period last year, the release added.

"Global cargo demand is declining. The usual increase in cargo demand prior to Chinese National day did not occur this year. Asia-North America market volume in 2nd quarter declined by 5% year-on-year due to a shift from goods to services consumption as a result of the relaxation of border control in many countries, the build-up of inventories of consumer goods, and a decline in consumer confidence due to rising global inflation. Asia-Europe market volume fell by 4 percent year-on-year in July and August due to inflation and the impact of higher energy prices."

ONE is expecting a full year profit of $15.3 billion, a decrease from the previous year (-$ 1.5 billion or 9 percent), reflecting declining demand and the deteriorating freight market. Revenue is likely to drop marginally to $29.9 billion from $30 billion.