Japan Ocean Network Shipping (ONE) in April 28th announced the 2022 fiscal year (that is, April 1, 2022 to March 30, 2023) results.
For the whole fiscal year 2022, from April 1, 2022 to March 30, 2023, ONE achieved operating income of US $29.282 billion, down 2.7 percent from the same period last year. Earnings before interest and tax (EBIT) was $16.32 billion, down 10.7 percent from the same period last year. Earnings before interest, tax, depreciation and amortisation (EBITDA) reached $15.005 billion, down 12.7 percent from the same period last year. Net profit was $14.997 billion, down 10.5 percent. Full-year container volume reached 11.081 million TEU in FY 2022, down 8.1 percent.
In the 2022 fiscal fourth quarter, from January 1 to March 30, 2023, ONE achieved operating income of $4.642 billion, down 44.3 per cent; EBIT of $1.184 billion, down 77.3 per cent; EBITDA of $1.558 billion, down 70.5 per cent; and net profit of $1.21 billion, down 76.3 per cent.
ONE said full-year net profit for fiscal 2022 decreased by $1.759 billion. The strong container market continued in the first half of the fiscal year, but in the second half of the year, due to the global economic slowdown and the relief of port congestion, the supply of transport capacity recovered. At the same time, under the background of high commodity inventories in the United States and rising inflation in Europe, global demand fell sharply, and the decline in demand in the container market in the first quarter of this year became more obvious, and the market freight rate rapidly weakened.
In terms of volume, container volume reached 2.596 million TEU in the first quarter of this year, down 8.5 percent year-on-year. Among them, the container volume of the Asia-North America eastbound route was 468000 TEU, down 10.5 percent from the same period of last year, and the space utilization rate was 90 percent. The container volume of the Asia-Europe westbound route was 346000 TEU, down 18.0 percent from the same period of last year, and the space utilization rate reached 95 percent. The container volume of the Asia-North America westbound route was 294000 TEU, up 22.5 percent, with 55%, space utilization rate 54%.
overall, ONE's performance in the first quarter of this year was in line with industry trends, but still exceeded market expectations. Previously, ONE expected a net profit after tax of $0.94 billion in the fourth quarter of fiscal year 2022, with the actual result reaching $1.21 billion. At the same time, despite weak demand, ONE's ship utilization on two major trade routes has fallen sharply year-on-year and improved month-on-month. Asia-North America eastbound space utilization increased to 90 percent from 80 percent in the fourth quarter of last year, and westbound space utilization increased to 55 percent from 49 percent. Asia-Europe westbound utilization increased from 90% to 95%, while eastbound utilization remained stable at 54%.
Jeremy Nixon, CEO of ONE, said that compared with the first quarter of the previous two years (that is, the first quarter of 2021 and the first quarter of 2022), the market demand for centralized transportation was significantly weak in the first quarter of this year. This is not entirely unexpected, as high commodity inventories in the United States and rising inflation in Europe have led to a decline in consumption after the 2022 epidemic. There have been recent adverse changes in sales and inventory levels, particularly in North America and Europe. Due to the contraction in demand, some east-west export voyages from Asia to major routes had to be reduced. In terms of recovery, the volume of trade within the Asian region and along the North-South route is generally more resilient. Judging from the booking situation, except for Chinese ports, the booking situation of other routes has improved slightly, but this is probably due to the Golden Week in early May. It may take at least until June and July to see any signs of significant improvement. On the supply side of capacity, the global port and inland congestion that erupted last year has now largely dissipated and capacity supply has resumed. However, in the US-West Port, last year's labor agreement between the Pacific Maritime Association (PMA) and the International Terminal and Warehouse Union (ILWU) has yet to be finalized. In addition, the tonnage available for hire remains tighter than expected due to the fact that charter parties renewed during the peak period of 2021/2 are generally longer and have not yet expired.
ONE's Investment and Response
The current container market is changing, and ONE is adjusting to these major changes, including the blank voyage period extension and other measures, aimed at improving profitability and reducing operating costs.
, as the shipping industry network tracking report, with the further decline in the shipping market, under the strategy of operating as the king and controlling costs, the liner companies represented by ONE have chosen to bypass the Cape of Good Hope to avoid the high river crossing fees of the Suez Canal and the Panama Canal during the return voyages of Asia-Europe eastbound and Asia-North America East. In addition, through reduced speed sailing to reduce fuel consumption.
In line with ONE's medium-term plan, will continue to manage its balance sheet prudently and make strategic investments where necessary. In March, ONE confirmed that it had placed an order for 10 13700TEU container ships to be delivered in 2025 and 2026. ONE also announced plans to acquire majority stakes in three container terminals (YTI/LA, Trapac-LA and Trapac/Okland) in the United States. In addition, ONE acquired a minority stake in Atlas, the Seaspan parent company. At the same time, the purchase of new refrigerated trucks and special cargo divisions was announced as part of an ongoing effort to upgrade and expand equipment worldwide. ONE is also committed to upgrading reefers with telematics IoT real-time trackers, and has entered into a new strategic cooperation with Sony to develop an integrated intelligent container tracking solution for its global dry containers.
Green strategy: ONE debuts CO2 calculation tool
The International Maritime Organization (IMO) will hold the MEPC 80 conference in London in June, which ONE hopes will lead to longer-term, more ambitious sustainability goals and fuel standards regulations. At the same time, ONE is advancing its evolving decarbonization strategy on the basis of further reducing emissions and developing future green fuel and carbon capture technology solutions. In addition, ONE will continue to promote pan-industry collaboration on sustainability, best practice sharing, and common technical and reporting standards. ONE also recently launched the "ONE Eco Calculator" calculation tool, can provide from the receiving point to the destination, including ship, equipment, port to port and inland transportation, including the full range of carbon dioxide emissions.
Increased service levels:
ONE is focusing on upgrading and improving global customer service levels through its new cloud service system. The service needs of shippers and consignees can be met more quickly and comprehensively. In addition to continuing to enhance the "Live Chat" function, the "ONE QUOTE" service has been further upgraded to simplify the online self-booking process. In addition, ONE also announced that it is actively promoting the wider use of electronic bills of lading in the industry.
In addition, ONE also continued to expand the port coverage, ahead of the east-west route in the deployment of larger ships, and to the north-south route and the Atlantic route to deploy additional capacity, has announced the upgrading of Myanmar, the Philippines, Bahrain, Kuwait, Peru, Chile, Israel and Egypt and other feeder services.
ONE Increases Africa, India and Middle East (AIM) Routes
On April 19,, ONE announced that from May 2023, the Africa, India and Middle East (AIM) service will increase from bi-weekly to weekly. This is part of ONE's commitment to strengthening African routes. "
Port sequence remains unchanged: Jebel Ali-Mundra-Nhava Sheva-Colombo-Durban-Tema-Tincan-Apapa-Durban-Jebel Ali (Zhou Ban)
It will be executed from May 6, 2023 from Jebel Ali westbound and June 9, 2023 from Tema eastbound ships.
ONE further strengthens Singapore-Philippines ties
On April 20,, ONE announced that it would update the port sequence of the PHX2 route. Updated Hong Kong Preface: Singapore-Manila-Cebu (CEBU)-Singapore.
ONE said the route would operate on a bi-weekly schedule. At present, ONE will be able to provide faster, reliable and efficient transportation solutions from Singapore to the Philippines through PHX, PHX2 and PHX3 routes: PHX: Singapore-Subic and Manila; PHX2: Singapore-Manila-Cebu; PHX3: Singapore-Davao-Santos General City.
ONE Launches New Route Connecting UAE and Bahrain/Kuwait (UGS)
ONE has announced the launch of a new route connecting the UAE and Bahrain/Kuwait. UGS routes provide faster, efficient and more stable connections from the transit center Jebel Ali to the vast Arabian Peninsula gateway.
Port sequence B:Jebel Ali (JEA) - Shuaiba (SAA) - Shuwaikh (SWK) - Jebel Ali (JEA), every 8-10 days
ONE launches Singapore-Yangon route
On March 20,, ONE launched the Singapore-Yangon route "SMM". The new route will merge the original "YGX" and "TMM" route services, and the merger will be upgraded to twice a week. Port: Singapore-Yangon (MIP) -Singapore-Yangon (AWPT) - Singapore
Source: Shipping Industry