Hong Kong: Transport and logistics firm Orient Overseas (International) said interim profit soared 654 percent to US$1.28 billion (HK$9.98 billion) with US$1 billion coming from the one-off sale of unit Orient Overseas Development.
Kenneth Cambie, the group's chief financial officer, said its shipping business has improved as rapid growth in demand led to an upward trend in freight rates.
The improved demand saw total liftings rise by 11.6 percent to 2.23 million from January to June. Revenue per TEU also increased 24 percent to US$1,133.
An interim dividend of 11.5 US cents was declared. A special dividend of 40 US cents was also recommended, which represents about 25 percent of the profit from the sale of the unit. Despite the robust numbers, the group remains cautious as demand, which typically drops in the fourth quarter, will pressure freight rates. "The success of the industry in the first half was driven by inventory level changes and does not necessarily indicate the actual consumer demand," Cambie said.
Commenting on current conditions in the container shipping market OOIL Chairman Mr. C C Tung noted : "While the strengthened demand experienced in the first half of the year has seen a welcome return to profitability for the industry, some caution is warranted to the extent that the demand has been driven by inventory level changes and is not necessarily indicative of actual underlying consumer demand during the period. Should second-half demand for consumer products and semi-finished goods prove to be as strong as is being anticipated, conditions for the container industry should remain positive for the remainder of the year and into 2011." [06/08/10]
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