Ocean Network Express (ONE) launched its first quarterly results for the 2018 fiscal year, reporting a net loss of USD 120 million, due to operational teething problems. ONE is comprised of NYK, MOL and K Line.
The operational teething problems that led to the USD 120 million loss, affected service quality during the operation start-up period. In addition, higher than expected bunker prices impacted the company, as many other companies as well.
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Nevertheless, ONE informed that the service quality has already stabilized, meaning that its business is expected to be back to normal situation from the the second quarter.
As for its net profit forecast, that remains at USD 110 million for the full fiscal year. This is supported by integration synergy which took place ahead of schedule, as well as by a change in accounting for lease contracts while higher bunker price have a negative impact.
Speaking about integration synergy, ONE noted that they are worth about USD 1.05 billion, and they are increasing, with 80% of the expected to be achieved in 2018 fiscal year, instead of 60% which was the initial target.
In addition, the profit from overseas terminal business will be incorporated from the fourth quarter of the fiscal year, because of a delay in business transfer.
Finally, utilization of ONE’s fleet was 73%, partly due to what K Line described as “clumsy services in the initial stage” of its launch. Namely, shippers and forwarders had complaints regarding booking difficulties, as the three ocean carriers attempted to merge their business and shift to a common booking system.
