Teething Problems Push ONE to Red

The newly launched container shipping joint venture Ocean Network Express (ONE) posted its first quarterly results for the 2018 fiscal year.

The company delivered a net loss of USD 120 million, which ONE ascribed to lower lifting caused by operational teething problems that affected service quality during the operation start-up period, and higher bunker price than originally forecast.

The Japanese JV further lowered its forecast for the business performance for the first half of the fiscal year by USD 40 million.

“Considering that service quality has already stabilized, overall business is expected to be back to normal situation from the 2Q onwards,” ONE said.

For the full fiscal year the company’s net profit forecast remains unchanged at USD 110 million. According to the company this is underpinned by “steady realization of integration synergy ahead of schedule as well as the change in accounting for lease contracts while higher bunker price will have a negative impact.”

Commenting on the progress of integration synergies, the container shipping company said the planned synergies worth USD 1.05 billion are emerging steadily with 80 pct of the planned total expected to be achieved in 2018 fiscal year, up from initially set target of 60 pct.

The profit from overseas terminal business will be included from the 4th quarter of the fiscal year due to delay in business transfer.