Ocean Network Express (ONE) reported a sharp fall in quarterly earnings, despite higher revenue, as rising fuel costs and continued disruption in the Middle East offset improving freight rates and stronger cargo demand.

The Singapore-headquartered carrier group posted revenue of $4.54bn for the three months of its financial year, to 30 June, up $490m year on year – but net profit fell $55m, to $31m.

EBIT came in at $76m, while EBITDA reached $329m. Liftings increased, to 3.28m teu, driven by growth on transpacific, Asia-Europe and Latin America trades, while the average freight rate improved, to $1,300 per teu.

CEO Till Ole Barrelet said: “The first quarter reflected a demanding market, with Middle East disruption raising fuel and operating costs across the industry. As demand recovered through the quarter, we improved yields and maintained high utilisation.

“We have raised our full-year forecast and remain focused on operational agility as conditions evolve. This reflects the dedication of our global team and the steady progress of our ONE2030 strategy. As market uncertainties persist, our priorities are protecting our people and assets, ensuring service reliability for our customers, and delivering sustainable long-term value for our stakeholders.”

ONE said demand had strengthened significantly through the quarter, shifting from mixed conditions in April to sustained recovery in May and June. Cargo volumes from China increased as shippers front-loaded imports ahead of expected fuel surcharge increases, possible tariff changes, and inventory restocking, boosting transpacific demand. Asia-Europe volumes also continued to recover.

The carrier said the global container fleet had expanded by more than 300,000 teu during the quarter, to more than 34m teu, but this had been partially absorbed by continued congestion and disruption linked to the Strait of Hormuz. It had maintained high vessel utilisation through “disciplined capacity management”, despite higher operating costs caused by rising fuel prices.

ONE launched its new east-west service network in April, introduced service upgrades across multiple trades, and continued deploying newbuilds under its ONE2030 strategy “to improve network competitiveness” while reducing its environmental footprint.

Reflecting stronger freight rates and demand, the Japanese carrier grouping upgraded its full-year profit forecast to $900m, triple its previous guidance of $300m.

“Spot freight rates have remained on an upward trend since the first quarter. Backed by solid cargo demand, higher freight rate levels are expected to persist, particularly through the second quarter across various trades,” it said.

“Despite adjusting our second-half outlook for higher fuel costs, the first-half profit has been substantially revised upward from the previous guidance.”

The outlook assumes operating conditions in the Strait of Hormuz stabilise to pre-conflict levels by October, with Cape of Good Hope diversions continuing for the remainder of the fiscal year.