Singapore-based shipping company Ocean Network Express (ONE) has reported a significant 92% decline in profits for fiscal year 2025, citing weak cargo demand, rising fleet capacity, and geopolitical disruptions as key challenges.
For the year ending March 2026, ONE posted $16.6 billion in revenue and $338 million in net profit, reflecting a 14% drop in revenue and a sharp decline in profit compared to the previous year. In the fourth quarter, revenue reached $4.04 billion, while profit fell 82% year-over-year to $55 million. This decline occurred despite a late recovery in freight rates, as cargo volumes remained sluggish.
CEO Jeremy Nixon credited the company’s profitability to strict cost management and operational efficiency, describing the global environment as “complex and volatile.”
“Despite heightened volatility in the fourth quarter, our disciplined cost control and operational efficiency enabled us to deliver a profitable full-year result,” Nixon said.
Challenges: Weak Demand and Growing Fleet Capacity
ONE’s results reflect broader struggles in the shipping industry. Cargo demand remained low throughout the year, particularly on transpacific routes, while the delivery of new vessels continued to expand global fleet capacity.
The Asia–Europe trade route provided some relief, with steady volumes ahead of Lunar New Year partially offsetting weaker performance elsewhere. Additionally, port congestion and severe weather disruptions tightened available capacity, offering limited support to freight rates, especially toward the end of the fiscal year.
Geopolitical instability added further pressure, particularly in the Middle East. Restrictions on transits through the Strait of Hormuz increased costs, though ONE noted that the direct impact on fourth-quarter earnings was limited.
Outlook for FY2026: Uncertainty Ahead
Looking forward, ONE expects to remain profitable in fiscal year 2026, forecasting a net income of approximately $300 million. However, this outlook depends on the assumption that conditions in the Middle East will stabilize by mid-year.
The company warned that ongoing disruptions in the Strait of Hormuz and broader regional tensions could continue to drive up costs and impact network reliability. Additionally, the continued diversion of vessels around the Cape of Good Hope, instead of using the Red Sea–Suez Canal route, is adding time and fuel expenses.
Despite these challenges, ONE remains focused on maintaining service levels while navigating an uncertain global environment.
Source: gCaptain