The downturn in the container industry has taken a toll on the half-year results from Hong Kong-based Orient Overseas (International) Ltd, the parent of Orient Overseas Container Lines (OOCL).
OOCL turned to a $56.7m loss in the first half (for the six-month period ended 30th June 2016) compared with profit of US$238.6 million for the same period in 2015.
There has been a 16% plunge in revenue to $2.56bn from $3.04bn previously as a weak market drove down revenue per teu.
The loss after tax and non-controlling interests attributable to equity holders for the first six months of 2016 included investment income of $25.2 million from Hui Xian and a net fair value gain of $9.7 million on the revaluation of Wall Street Plaza (after capital expenditure net off).
The Chairman of OOIL, C C Tung, said, “Market conditions in the first six months of 2016 have been difficult for the industry. Weak economic growth in many key economies has constrained consumer demand, and global uncertainty seems to have given rise to some level of slowdown in corporate and government investment. Consumer demand and investment are the key drivers of demand in our industry, and in this context it is no great surprise that cargo volume growth has been uninspiring.”
“Although fuel costs have risen considerably since the remarkable lows of the first few months of 2016, they remain far lower than in recent years, and provide some element of cushion against the unsustainably low freight rates that have been seen in some trades”, added Tung.
Tung concluded that, “The first half of 2016 was disappointing for OOIL. We expect continued challenges given the global landscape. However, we remain confident that our prudent and deliberate management approach will lead the Group through the challenging times. Our customer base remains solid, and our business operations continue to benefit from our focus on cost and on efficiency, helped enormously by our ongoing investment in information technology
. My colleagues and I remain committed to ensuring that the Group is well positioned for the future and continues to be one of the highest performing in the industry.”