OOIL sees 32% rise in H1 profit despite tough environment

While the profit included investment income of $27.2m from its investments in Hui Xian REIT and a net fair value gain of $9.8m on the revaluation of its Wall Street Plaza property, OOIL attributed the good results mainly to good yield management and cost gains. On the cost side OOIL benefitted from a 38% drop in bunker costs to $329m in the first half from $529m in the previous corresponding period, while it managed to control bunker use so well that total bunker consumption remained the same despite a 17% increase in net operating capacity.

OOIL chairman CC Tung said: “The first half of 2015 was an eventful six months for the global economic environment. Greece’s ongoing challenges, and the US / Iranian nuclear negotiations acted as a backdrop to a slow but improving global economy.  At this time, the Eurozone had reached a preliminary agreement with Greece, and the US and Iran had concluded their negotiations, subject to respective domestic legislative approval, paving the way for the gradual reintegration of Iran into the global economic system.”

"In the latter half of the reporting period, with idling ships reactivated and new build capacity delivering, freight rates moved rapidly downwards, forcing margins to narrow.  It is likely that the industry as a whole will report mixed results for the half year”, added Tung.

Acting cfo Alan Tung said: “The Group continues to have sufficient borrowing capacity and remains comfortably within its target of keeping a net debt to equity ratio below 1:1.”  He added that “the Group is deliberate in its efforts to balance the need for a strong and liquid balance sheet, necessary in a capital intensive business, with an industry-competitive shareholder return.”