[090820.EN.SEA] ONE Posts Second Quarter Profit Despite Revenue, Volume Declines

JAPANESE owned but Singapore based Ocean Network Express (ONE) suffered a decline in revenue of 11.2 per cent, even though it turned a profit.

ONE also experienced "considerable deterioration" in traffic compared to the same period in 2019, due largely to the decline in trade caused by the Covid-19 pandemic.

The carrier also said it had struggled with weak freight rates at the beginning of April. However, rates stabilised at the end of April as China's exports began to recover.

Profitability was achieved in this first quarter because ONE promoted cost reductions while minimising the fall in capacity utilisation rates through the additional reduction of services in both the Asia-North America and the Asia-Europe routes and also benefited from falling fuel prices."

The Covid-19 pandemic has caused chaos across the industry and trade disruption in ports across the world, said ONE.

ONE also posted 20 per cent drop in liftings from the first quarter, reports London's Loadstar and suffering a 20 per cent fall in bunker

Additionally fortunes were boosted by a 20 per cent fall in the price of bunker to $348 per ton and surcharges levied on shippers for low-sulphur fuel. ONE's profit for the quarter soared by more than 3,000 per cent over the $5 million year on year.

"Liftings largely decreased due to the impact of Covid-19," said ONE, but added that its improved profitability was attributed to a "relatively stable short-term market," cost reductions due to a reduction in its fleet, extra blanked sailings, a "sharp bunker price drop", reductions in overheads for agency fees and lower IT system costs.

From April, the carrier suspended publication of its monthly liftings statistics for Asia-Europe and the transpacific, but has included the quarterly data in its results. For headhaul routes, vessel utilisation was 96 per cent for both trades. This compares favourably with an average load factor for its previous full year of 93 per cent for Europe and 91 per cent for North America.

Moreover, backhaul vessel utilisation levels were also higher, at 51 per cent compared with last year's 44 per cent from North America, and 75 per cent against 67 per cent from Europe.

ONE's average rate per TEU for the quarter came in at $1,023 per TEU compared with OOCL's average of $917 per TEU.

Source : HKSG.