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OOIL turns in 13% 2015 profit rise despite tough conditions

OOIL turns in 13% 2015 profit rise despite tough conditions
Despite turning in one of the best 2015 results among liner companies so far with a 13% rise in profit to $284m, Orient Overseas (International) Ltd the parent of Hong Kong line Orient Overseas Container Line (OOCL) remains cautious about the year ahead and is challenging for a challenging rate environment, cfo Alan Tung told a press briefing.

The results are all the more remarkable as revenue had fallen from $6.5bn to $5.9bn, and both load factor and revenue per teu had fallen to 72% and by 10% to $936 per teu respectively on flat volume growth of 5.6m teu.

However, OOCL was able to boost its EBIT margin by 1.2 percentage points to 5% and raise liner and logistics division EBIT by 18% to $294m. Tung summed up the satisfactory results, and said: "Operating performance came in well, and I'm pleased with it."

He pointed out that OOCL's continued focus on yield management and cost efficiency gains had helped the group's performance. Total unit cost has come down 11% from 2014 and from this unit bunker consumption has managed to be cut by a further 1% despite a 6% increase in loadable capacity, no doubt helped by the low oil price environment.

Summing up OOIL chairman CC Tung said: "At the start of 2015, container shipping companies enjoyed unforeseen conditions that were, almost without exception, positive.  For those few months, substantially lower fuel costs and gains in momentum in the US recovery drove industry-wide results that were better than anticipated."

Looking ahead, the cfo noted that the January figures for this year are looking better but warned that great uncertainty still exists and the full first quarter figures would be a better indicator of what lies ahead. The transpacific numbers in particular with a 21% rise in the first month of the year will be distorted by the Lunar New Year effect and the low base from the West Coast labour disruptions last year.

In response to movements in the liner industry, he also commented that OOCL is happy with the G6 alliance. "We think G6 is operating well and is competitive and it's a viable alliance platform," Alan Tung said.