Two local shipping firms - Orient Overseas (International) (0316) and Sinotrans Shipping (0368) - reported dismal interim results yesterday amid continued oversupply in the industry.
Two local shipping firms - Orient Overseas (International) (0316) and Sinotrans Shipping (0368) - reported dismal interim results yesterday amid continued oversupply in the industry.Orient Overseas announced an interim loss of US$15.26 million (HK$119.02 million) for the six- month period ended June 30 this year, compared with a profit of US$116.5 million for the same period last year, due to declining freight rates.Rates fell especially on Asia-Europe routes as more mega vessels started sailing while cargo demand fell."The container transportation industry continues to tackle the challenges of weak cargo growth, capacity oversupply and high bunker costs," said acting chief financial officer Alan Tung Lieh-sing. Although the second half is usually the industry's peak period, the problem of oversupply will remain in the next year or two as industry supply has risen by 10 percent so far this year, Tung said. Average freight revenue per TEU was US$1,088, a 2.2 percent drop from US$1,112 per TEU.Separately, Sinotrans Shipping said interim net profit plunged 92 percent to US$1.61 million, while revenue fell 12.8 percent to US$93.5 million.Revenue mainly came from US$57.8 million charter hire income - down 29.4 percent - and ocean freight income of US$27.7 million, up 90 percent."The demand-supply equilibrium will not be restored in the short run," the firm said.Neither company declared an interim dividend. Share price of Orient Overseas rose 1.46 percent to HK$45.25 yesterday, while that of Sinotrans Shipping fell 0.54 percent to HK$1.86.
