ONE recovers from difficult year

Japanese container shipping line ONE reports a profit for its first quarter 2019, which thus marks a significant improvement compared to the same period last year. The company now raises its guidance for the full year 2019.

After a somewhat challenging launch in 2018, Japanese container shipping line ONE can now report a positive result for the first three months of its 2019 financial report, which have just ended.

Difficult merger

Last year was a long struggle for the shipping line and its CEO, Jeremy Nixon, who found himself repeatedly referring to the teething problems that were especially caused by a difficult merger of the container activities of NYK, MOL and K Line.

ONE’s first year produced a hefty deficit of USD 586 million, but the current financial year is expected to be significantly better and at least result in a profit for the shipping company, which is headquartered in Singapore. Though the profit for the first quarter is modest, USD 5 million, it must be compared to a deficit of USD 125 million in the first quarter last year.

Upgraded guidance

The positive numbers for the first months of the year also make ONE upgrade its guidance slightly for the full year. Where the company has till now expected a profit of USD 85 million, it now expects a profit of USD 90 million.

Factors such as stronger freight rates in North and South America have helped boost the company’s results, according to the presentation published by ONE on Wednesday. On the other hand, rates on Europe decreased.

The improvement of services alone, a significant contributor to the negative result last year, has boosted the result in the latest interim report by USD 220 million – though operating costs have increased by USD 135 million.

New action plan

ONE has also published its action plan aimed at reaching its full-year target. This includes expectations for when the synergy effects promised by Nixon will be realized. 82 percent of the USD 1,050 million were achieved in 2018, and the company expects that 96 percent of the target will be met this year, and the full potential realized during 2020.

ONE is a member of The Alliance, which South Korea’s HMM recently decided to join, opting out of Maersk and MSC’s 2M.