Japanese shipowner Nippon Yusen Kaisha (NYK) signalled a challenging year ahead for Ocean Network Express (ONE) after record profitability in the past years.

Hitoshi Nagasawa, NYK president, made the warning in his New Year's message as he also announced expectations of a record profit of ¥1 trillion (US$7.6 billion) for the full year of fiscal 2022.

Nagasawa said the Covid-19 pandemic is "still not over", but the global trends in 2023 will differ from those of the past two years.

 Hitoshi Nagasawa, NYK president. (Source: NYK)

"Tidal wave" in ONE's business environment

"The prolonged impact of Covid-19, soaring energy prices, inflation worldwide, and the following monetary squeeze triggered by the Russia-Ukraine conflict are causing concern about an economic recession," Nagasawa said in his speech delivered on January 5 at the NYK head office.

"With consumer spending slumping in Europe and other parts of the world, ONE, a major driver of earnings, is facing a tidal wave in its business environment," he added.

"I predict the NYK Group as a whole will face a challenging year," Nagasawa further said.

ONE is a joint venture between NYK,  Mitsui O.S.K. Lines (MOL), and K Line.

Nonetheless, the NYK president allayed concerns and noted that the company has long prepared for the challenges ahead.

"You don't need to be too pessimistic," Nagasawa said. "We have long anticipated that the strong tailwind would not last long and prepared as many countermeasures as possible over the past two years."

"Specifically, we have implemented structural reforms in the dry bulk business, cost reductions in various areas, and other measures to dispel concerns about the future," he added.

"The situation will change drastically, but if we continue to fulfil our roles, we can achieve positive results," Nagasawa further said.