FY2023 3rd Quarter Results
Sluggish consumption growth, a decrease in cargo movement during low season, and an influx of new ships contributed to the further softening of the supply and demand trend and low-level short-term freight rates in 3Q. The 3rd quarter concluded with a deficit of US$83 million, a significant decrease compared to the same period last year.
•In North America, domestic consumption remained firm consistent with the previous quarter, but marine cargo movements slowed as the low-season began. In Europe, prolonged inflation has led to a stagnation in personal consumption, and with the additional uncertainty surrounding the situation in the Middle East, cargo movements have not seen a full-fledged recovery.
•The increase in the number of new ship deliveries continued to boost the supply side, but ONE made efforts to implement blank sailings sfficiently and streamlined services.
•Freight rates increased in December, however on average they remained at a low rate for the entire quarter due to sluggish rates in October and November.
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3.FY2023 Full Year Forecast
Full-year results for FY2023 are expected to show a profit after tax of US$ 856 million, a decrease from the previous year due to the deterioration of the freight market caused by the softening of supply and demand.
•Despite the positive trend in cargo movements, low consumer demand due to prolonged stagnation is not supporting a strong recovery of cargo movements. It is expected that it will take some more time for marine transport cargo movements to fully recover.
•The increase in supply caused by the influx of the large number of new vessel deliveries shall continue. However, the situation in the Middle East has caused an instant tonnage shortage.
•Although the supply and demand outlook and freight market conditions are extremely uncertain, ONE will focus on maximizing profit by flexible tonnage deployment and efficient equipment control based on demand.
Source: Ocean Network Express