Ocean Network Express (ONE) expects profit for the second half of fiscal 2022 to be lower than the profit it reported for the second quarter due to the effects of falling demand and a deteriorating freight market.
Reporting results for the second quarter ended September 30, 2022 ONE posted $5.52 billion in profit over the three-month period, up from $1.32 billion year-over-year.
The company recorded a sudden drop in demand in August and September, along with a sharp drop in spot container freight rates. “Despite the deteriorating market situation, freight rates remained high throughout the second quarter compared with the same period last year, supporting the profit figure,” said ONE. In the first half of fiscal 2022, the Japanese-owned container shipping company reported a profit of $11.02 billion.
Looking at the second half of fiscal 2022, ending March 31, 2023 ONE expects a significantly lower profit margin than reported for the first half of the year. “The drop in freight demand is expected to continue into the second half of the year, resulting in a forecast profit after tax of $4,250 million in the second half of fiscal 2022,” the carrier said.
As a result, the full-year profit forecast for fiscal year 22 is $15.27 billion, about $1.49 billion lower than the previous year. This reflects reduced demand and a deteriorating freight market.