Loss of US$248 million! ONE releases fourth quarter financial results

Although ONE's container volume increased 17% to 3.1 million TEUs in the fourth quarter, its revenue fell 46% to $3.4 billion compared with the same period last year. The quarter's EBIT loss was US$248 million, with a net loss of US$83 million.

Meanwhile, ONE alliance partner Hapag-Lloyd reported a preliminary EBIT loss of $3 million for the quarter on March 30. During this period, Hapag-Lloyd's average rate per TEU was US$1,190, while ONE's average rate per TEU was US$1,081.

ONE said that sluggish consumption growth, reduced freight volume in the off-season and the commissioning of new ships have jointly led to further weakening of supply and demand trends in the quarter, with lower spot freight levels. This is a view shared by its 40% shareholder MOL. However, MOL noted in its outlook that it expects its container business to "ensure certain profit levels" due to the latest situation in the Middle East.

Consumer demand in North America remains strong, but is beginning to slow as seasonal factors change. In Europe, where long-term inflation has stagnated personal consumption and growing uncertainty over the situation in the Middle East, freight volumes have yet to fully recover.

Still, sluggish consumer demand has not supported a strong recovery in the liner business. Full recovery will take some time, the company added. Despite the great uncertainty in the supply and demand outlook and freight market conditions, ONE will focus on maximizing profits through flexible capacity deployment and efficient equipment control based on demand.

In its quarterly financial report ending March 31, ONE expects net profit to be US$856 million, compared with US$15 billion in the same period last year. The growth was driven by expected profits of $239 million for the quarter. Undoubtedly, this is mainly due to the significant increase in freight rates and the multiple surcharges caused by the diversion of the Suez Canal.

CEO Jeremy Nixon noted that the economic outlook in North America and Europe is "starting to look more encouraging" and consumer spending is starting to recover. However, recent instability in the Middle East and longer sailing diversions will have a significant impact on transit times and the ability to maintain weekly sailing frequencies.

Regarding Hapag-Lloyd’s withdrawal from THE Alliance after one year, Nixon did not mention ONE’s future in the alliance. But last week, alliance members issued a brief joint statement stressing their "unwavering commitment to maintaining strong cooperation through 2024."

ONE is the world's sixth-largest container shipping company, with 234 ships and a capacity of 1.8 million TEU, according to Alphaliner. This includes the last three of the six 24,000 TEU long-term charter vessels received this quarter, which are deployed on the Asia to Northern Europe route.