Ocean Network Express (ONE) has lifted its full-year forecast for the 2021 financial year to $15.4bn.
The bullish projection comes as the world’s sixth-largest liner operator reported third-quarter results nearly $1bn higher than the previous year.
The Japanese-owned company logged a profit of $4.9bn for the period from October to December, up from the previous year’s figure of $3.94bn.
That was largely due to ongoing strong demand and improvements in the freight market.
In October, ONE expected to make a $11.76bn profit for the current financial year.
But strong cargo demand and ongoing turmoil in the global supply chain had pushed up spot rates, it said.
So the company expects to make a profit of $4.75bn in the final quarter of the financial year, despite Chinese New Year and blank sailings disrupting supply chains.
Strong performance
Chief executive Jeremy Nixon praised the “strong performance”.
“Our balance sheet is now fully restored with some increasing safety buffer to support the business’ future investment needs,” he said.
Nixon added that the company is in the process of finalising a midterm business plan.
That had the aim of providing “a healthy balance between improving product competitiveness, annual investor returns and future long term enterprise value growth”.
Global supply chain bottlenecks continued to impact marine and inland operational environments, and disruption was likely to remain so for the majority of 2022, Nixon said.
He said the situation was particularly acute in North America where ONE is only able to deploy around 80% of its proforma weekly capacity.
Contact negotiations
The company expects to recoup higher yields in ongoing contract negotiations with shippers.
“The 2022 client contracting is now well underway with January-December contracts completed, and April-March now commencing,” Nixon said.
“The fixed contract rate levels for 2022 are already indicating a significant yield enhancement over 2021 level.
“Meantime the short-term spot market remains firm,” he said.
ONE continues to launch new services, despite a shortage of market tonnage and challenging main port operations.
Recently launched services include a Russia-Far East service linking China and South Korea, and a direct service between Nhava Sheva in India and its core transshipment hub in Singapore.
ONE is strengthening its environmental capabilities and has opened a green strategy department at its Singapore headquarters.
Nixon said this had been launched in preparation for ONE’s future newbuilding requirements and help reduce the company’s carbon footprint.
ONE’s revenues in the third quarter were $8.3bn. Revenues for the first three quarters of the Japanese financial year were $21.6bn.
