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OOCL Q3 revenue slumps 12 pc with plummeting rates

HONG Kong's Orient Overseas Container Line (OOCL) has reported a 12.2 per cent drop in third-quarter revenue despite an up tick in volume mainly due to plunging rates and excess capacity.

OOCL Q3 revenue slumps 12 pc with plummeting rates
25 October 2015 - 18:54

OOCL Q3 revenue slumps 12 pc with plummeting rates

HONG Kong's Orient Overseas Container Line (OOCL) has reported a 12.2 per cent drop in third-quarter revenue despite an up tick in volume mainly due to plunging rates and excess capacity.

The shipping line's third-quarter unaudited revenue fell to US$1.3 billion from $1.5 billion a year earlier, the IHS Media reported.

Asia-Europe routes suffered the steepest drop in revenue with weak demand coinciding with the introduction of large ships, sending rates into freefall.

Revenue from Asia-Europe routes tumbled 32.2 per cent to $210.2 million. Intra-Asia and Australasia volume fell 13.4 per cent, to $460.3 million. Trans-Pacific revenue was down slightly by 0.2 per cent, to $418.1 million while trans-Atlantic revenue declined 8.6 per cent, to $143.8 million, the report said.

OOCL's overall drop in revenue nearly matched the 12.3 per cent increase in the carrier's loadable capacity in the quarter. OOCL's overall load factor fell 7.1 per cent year over year, despite a 1.9 per cent increase in volume. Average revenue per TEU dropped 13.8 per cent in the quarter.

For the year's first nine months, the shipping line's total volume was down 9.9 per cent while revenue fell 8.4 per cent. Loadable capacity for the nine-month period rose 6 per cent, and the carrier's overall load factor was down 5 per cent. Overall average revenue per TEU during the January-September period declined 7.6 per cent.

OOCL's trans-Pacific volume, which comprised 25 per cent of the carrier's global volume in the third quarter, rose 9.5 per cent year over year, to 365,162 TEU. Intra-Asia and Australasia volume, 53 per cent of the carrier's total, rose by 4.6 per cent, to 769,064 TEU.

Volume on Asia-Europe routes fell 11.5 per cent, to 222,872 TEU, and trans-Atlantic volume fell 9.6 per cent, to 90,366 TEU.

Like several other carriers, OOCL reported higher profit in the year's first half, but it was mainly because of declining fuel costs.

OOIL chairman C C Tung said in August that he expected vessel supply and demand to be more balanced next year as delivery of new vessels tapers off.

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