OCEAN Network Express has reported a 97% decrease in net profit after tax for the second quarter of the 2023 financial year.

ONE’s second-quarter NPAT came to US$187 million, which was “significantly lower” than the US$5.5 billion posted for the same period last financial year.

EBIT dropped 99% to US$58 million and revenue slid 62% to US$3.5 billion.

“Despite the start of the peak season, there was no strong recovery in cargo movement,” the carrier said.

“The supply-demand balance softened due to an increase of newly built vessels, and short-term freight rate levels did not sustain their upward trend,” it said.

ONE expects full year results for FY 2023 to show a profit after tax of US$851 million – a decrease from the previous year – because of deterioration inf the freight market caused by declining demand.

“Although it takes some time to see a solid recovery of cargo movements as high interest rates and inflation continues, a gradual recovery in the second half is expected,” it said.

“The oversupply of tonnage, caused by the delivery of a large number of newly built vessels in this fiscal year, is expected to continue through the second half.”

ONE said it expects the freight market to remain weak in the second half due to the supply and demand gap.

The carrier said it intends to focus on maximising profit by flexible tonnage deployment and efficient equipment control based on demand.