The Worst Report Comes Out! ONE: Profit Plunges 99% Year On Year

October 31, the shipping company ONE released the latest quarterly results report.

The data show that ONE achieved revenue of $3.549 billion in the second quarter of fiscal year 2023 (July 1, 2023 to September 30, 2023), down 62% from a year earlier; profit before interest, tax, depreciation and amortisation (EBITDA) was $496 million, down 92% from a year earlier; profit before interest and tax (EBIT) was $58 million, down 99% from a year earlier; and profit after tax was $187 million, down 97% from a year earlier

ONE said that although the peak season has begun, freight volume has not rebounded strongly. And due to the increase of new ships, the balance of supply and demand tends to ease, and the level of short-term freight can not maintain the upward trend. On North American routes, cargo volumes showed some upward momentum in August, but there was a lack of sustainability against the backdrop of weak overall consumption and other factors.

On European routes, a gradual recovery has been seen in the decline in demand caused by high inflation, but this has not led to a full recovery in freight volume.

Financial report data show that:

From July to September, the freight volume of ONE routes from Asia to North America fell 7.5% from a year earlier, and the supply of goods picked up temporarily during the peak season, but inventory adjustment was slow, sales of general consumer goods stagnated and growth was sluggish.

From July to August, cargo volume on routes from Asia to Europe increased by 6.1%. Although demand continued to recover moderately from the decline in the second half of the previous fiscal year, the recovery in consumption remained weak against the backdrop of inflation and high interest rates.

On the supply side, as the problem of supply chain disruption has been generally solved, new ships have entered the market, resulting in increased supply pressure. As a result, the trend of weak supply and demand continues. Although supply and demand for intra-Asian and South American routes are weak, cargo for these trades remains strong.

ONE expects its full-year after-tax profit for fiscal 2023 to be $851 million, down about $14.146 billion from fiscal 2022, as the freight market worsens due to falling demand.

At the same time, ONE said that although freight volumes will take some time to recover steadily due to high freight rates and persistent inflation, they are expected to recover gradually in the second half of the year.

ONE added that the freight market will continue to be weak in the second half of the year due to the gap between supply and demand, but ONE will focus on maximizing profits through flexible tonnage deployment and efficient demand-based equipment control.