ONE Posts Record First Quarter Profit

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ONE’s 1st quarter results for FY2022 is a record profit of US$5,499 million, an increase of US$2,940 million from the same period last year.

• Global cargo demand in April-June remained steady, with no major breakdown despite the impact of the Shanghai’s lockdown and the Ukraine crisis.

• On the supply side, port congestion showed signs of improvement in some areas, but supply chain disruptions continued around the world, including deterioration on the east coast of North America.

• As a result, freight rates remained significantly higher than those in the same period last year, increasing the profit amount.

  • Liftings: Slightly decreased from the same period last year.Operation costs: While ships’ costs increased, bunker consumption decreased due to a reduction in the number of operating vessels and port congestion, resulting in a similar level as the same period last year.
  • Freight: Significantly increased.
  • Variable costs: Although cost saving initiatives progressed, additional costs incurred due to global inflation and shoreside/inland congestion.
  • Bunker price: Further increased.
  • Overhead costs: Agency fees and system costs increased.
  • Others: Remained mostly unchanged from the same period last year.

The Impact of & Countermeasures to Supply Chain Disruption

The global cargo demand remained firm. Asia-North America market volume in April and May increased by approximately 4% Y on Y. Asia-Europe market volume in April and May decreased by approximately 7% Y on Y due to the impact of the Shanghai lockdown and the Ukraine crisis.

  • The congestion has eased in Los Angeles and Long Beach, but worsened at other North American ports (Vancouver, New York and Savannah, etc.). Also, inland congestion is deteriorating again. Moreover, congestion in Europe (Hamburg, etc.) continues.
  • In China (Shanghai, Shenzhen etc.), re-occurring lockdowns have caused trucker shortages and yard congestion. Although the lockdown was lifted in June, subsequent strict measures have made recovery slow.
  • ILWU(International Longshore and Warehouse Union) current agreement expired at the end of June. Discussions are on-going.

FY2022 Full Year Forecasts
ONE expects that the excessive strain on the entire global supply chain and the resulting operational bottlenecks caused mainly by the spread of COVID-19, will eventually be resolved and the situation will gradually move toward normalization. However, it is currently difficult to predict exactly when due to the wide range of effects.

• Furthermore, it has become more difficult to forecast the overall business environment in the face of increasing uncertainties such as the ongoing Russia/Ukraine crisis, the impact of China’s zero COVID-19 policy, and ILWU labour negotiations.
• Under these circumstances, it is therefore extremely difficult to announce a reasonable business forecast for the current financial year and as such the company’s forecasts for FY2022 are yet to be finalized. However, ONE continuously strives to end the current turmoil faced in the global supply chain as well as stabilizing its performance all the while flexibly responding to changes in the environment.