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OOIL bucks trend with $181m profit

OOIL bucks trend with $181m profit
Hong Kong: Orient Overseas (International) Limited (OOIL) bucked the trend in the container shipping industry staying in the black with a $181.6m profit in 2011. Profits were down on $1.87bn in 2010 that figure, however, included the $1bn gain on the sale of the group’s former China property development business. Revenue however stayed relatively flat at $6.01bn down from US$6.03bn.  

Commenting on the results, OOIL chairman CC Tung said: “While we started 2011 believing that the extremes of 2009 and 2010 were behind us and that we had a period of steady growth ahead, trading conditions in the container transportation industry over the past year became increasingly difficult. While overall global demand levels grew, the slow rate of economic growth in the United States and in Europe saw only muted volume growth for container trade to those markets. Demand growth proved inadequate for the orderly absorption of new-build capacity that delivered during the year.”

OOIL’s boxline Orient Overseas Container Line (OOCL's) liftings increased just 6% year-on-year, and the peak cargo season was brief with only moderate volume increases in July and August. Average revenue per teu was 7% lower overall for the year, mainly due to a 29% erosion in freight rate levels from Asia to Europe the carrier said.

“OOCL’s operating profitability was impacted by the downwards pressure on freight rates that intensified over the second half of the year. The traditional Trans-Pacific peak season in the third quarter was disappointing in terms of both volume and prevailing freight rates. While normal competitive pressure was felt across all trades as carriers sought to maintain market share while absorbing increased capacity, the Asia-Europe trade saw extraordinary freight rate declines. With the continued high price of bunker fuel also squeezing margins, the need for greater operational efficiency saw new alliances formed for Asia-Europe, including a group of six carriers to be called the G6 Alliance of which OOCL is a founding member,” noted Tung.

 

TAGS: Containers
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