ONE reports resilient Q1 performance amid cost pressures

Ocean Network Express (ONE) reported mixed but resilient financial results for the first quarter of FY2026, posting a net profit of $31 million despite a challenging operating environment. The company generated revenue of $4.539 billion, EBITDA of $707 million, and EBIT of $76 million during the quarter. Strong cargo demand toward the end of the quarter supported higher freight rates, with the average freight rate reaching $1,300 per TEU, while lifting volume totaled 3.257 million TEUs.

However, rising fuel prices and higher operating costs, driven by developments in the Middle East, weighed on profitability. Despite these headwinds, ONE maintained high vessel utilisation through disciplined capacity management and operational execution, enabling it to remain profitable and deliver a resilient quarterly performance.

The profit and loss analysis shows that ONE experienced significant gains from higher cargo demand and stronger freight rates in Q1 FY2026. Still, these were largely offset by rising operating expenses. Starting from a Q1 FY2025 profit of $86 million, increased lifting volumes across most trade lanes contributed an additional $172 million, while improving freight rates, driven by a tightening supply-demand balance, added a further $210 million.

However, higher ship operating costs reduced earnings by $101 million, and variable costs linked to increased cargo volumes cut profits by another $132 million. The largest negative impact came from bunker fuel prices, which rose sharply due to the conflict in the Middle East, reducing profit by $125 million.

Higher overhead costs and other expenses further weighed on results, lowering earnings by $42 million and $38 million, respectively. As a result, despite robust revenue growth and strong market demand, ONE's net profit declined to $31 million in Q1 FY2026, highlighting how escalating fuel and operating costs eroded much of the benefit from stronger freight volumes and rates.

ONE maintained strong cargo volumes in Q1 FY2026, handling 3.257 million TEUs, an increase from 3.165 million TEUs in Q1 FY2025 and the second-highest quarterly volume over the past two fiscal years, although slightly below the 3.323 million TEUs recorded in Q2 FY2025. The Asia–North America (Transpacific) trade remained the company's largest market, with volumes rising from 889,000 TEUs in Q1 FY2025 to 969,000 TEUs in Q1 FY2026, driven by front-loading of shipments ahead of potential tariff changes and retail inventory replenishment.

Asia–Europe volumes also increased to 769,000 TEUs from 702,000 TEUs a year earlier, reflecting a steady recovery in demand. Intra-Asia traffic softened slightly to 738,000 TEUs, compared with 835,000 TEUs in Q1 FY2025, while the 'Others' category remained relatively stable at 781,000 TEUs, up from 739,000 TEUs a year earlier.

As of June 30, 2026, ONE operated a fleet of 284 vessels with a combined capacity of 2.26 million TEUs, reflecting its continued investment in expanding and modernising its global network. The fleet includes 12 ultra-large container vessels (ULCVs) with capacities of 20,000 TEUs or more, 75 vessels in the 10,000–19,999 TEU segment, 85 vessels with capacities between 5,000 and 9,999 TEUs, and 112 vessels of up to 4,999 TEUs, providing a balanced mix of large, medium, and regional ships.

During Q1 FY2026, the carrier took delivery of one newbuild vessel with a capacity of 13,932 TEUs, further strengthening its fleet. The company also continues to expand its future capacity through an active orderbook, underscoring its long-term strategy to enhance operational efficiency and support growing global trade demand.