OOIL Profit Edges Up
Orient Overseas (International) Ltd recorded an almost 5% increase in profit for the full year 2015, despite the weakness in the container shipping market, thanks in part to yield and cost management efforts.
Though the year started well for the Hong Kong corporate, supply and demand imbalance eventually took its toll, say market analysts.
OOIL said its profit attributable to equity holders for the year ended 31 December 2015 rose 4.9% year-on-year to US$284 million. Basic and diluted earnings per share were US45.4 cents.
The revenue was US$5,953 million, a decrease of 8.7% from a year earlier.
The Chairman of OOIL, C C 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.”
“Unfortunately, the economic context became increasingly complicated as the year progressed. The fall in oil prices led to a reduction in energy-related capital expenditure, and to some producers bordering on default. Trade growth was limited, and the Fed was signalling (and eventually implemented) a start to the normalisation of interest rates. The second half of the year saw retail sales stagnating further, thereby reducing imports from Asia,” noted Tung.
“By the end of the year, the worsening imbalance in supply and demand, driven by large amounts of new tonnage being introduced at a time of lacklustre volume growth in many trades and even shrinkage in others was having a dramatic effect. Capacity had started to be taken out of the market in response to slower demand growth, and having witnessed a substantial fall in rates, lines were forced to surrender all of (or more than) the benefit of lower fuel prices to their customers,” said Tung.
“OOCL has a long track record of outperforming the market, in both up and down cycles. Through our continued efforts in yield and cost management, as well in operational efficiency and customer focus, the Group continues to be an industry leader. Furthermore, we continue to be one of the few carriers with a history of solid financial performance as well as a robust balance sheet,” remarked Tung.
OOIL owns one of the world’s largest international integrated container transport businesses which trades under the name “OOCL”. With more than 320 offices in 70 countries, the Group is one of Hong Kong’s most international businesses. OOIL is listed on The Stock Exchange of Hong Kong Limited.
