From gCaptain:
Japanese carrier Ocean Network Express (ONE) is set to see losses spiral to $600m in its first year, as it struggles to “restore the trust of customers” after the chaotic April launch.
ONE has alerted shareholders of K Line, MOL and NYK to a $310m loss for the half-year period to 30 September.
Moreover, the merged carrier network has drastically revised its forecast of a full-year profit of $110m to a loss of $600m, which would see it sink towards the bottom of the carrier profitability league table.
Prior to the merger of the three carriers, chief executive Jeremy Nixon and his team were bullish about the prospects for ONE, predicting more than $1bn a year in synergy cost savings. They said this would bring a profit in the first year of $110m, followed by $313m and $648m in consecutive years.
What followed, however – in the words of its own shareholder, K Line – was a “clumsy” launch, which left customers, loyal to the trio for decades, unable to book containers or obtain information about the status of their cargo.
In a joint profit warning today, ahead of first-half results on 31 October, the Japanese trio – K Line and MOL each hold a 31% stake, while NYK has the remaining 38% – endeavoured to provide investors with explanations for the disastrous start.
They said lifting and utilisation levels had fallen due to “teething problems” after a chaotic launch, which it attributed to not enough staff, and those they had not being familiar with the NYK IT system.
In fact, ONE’s management was obliged to significantly revamp the rationalisation plans, which represented more than a third of the planned synergy savings, by putting in more staff and hiring new workers....MORE
