OOIL 2012 profit up 63.3pc to US$296.4 million, revenue rises 7.4pc
HONG KONG's Orient Overseas (International) Limited (OOIL), parent of Orient Overseas Container Line (OOCL), posted a 2012 net profit increase of 63.3 per cent year on year to US$296.4 million drawn on revenues of $6.45 billion, up 7.4 per cent.
OOCL liftings increase 3.7 per cent to 5.2 million TEU with revenue per TEU rising 2.9 per cent year on year to $1,131 as operating capacity rose 8.8 per cent to 452,246 TEU, the company said.
"While 2012 was a profitable year for the group, the container transportation market continued to be challenging as the industry struggled to absorb substantial new-build vessel capacity while facing ongoing weak demand growth," said OOIL chairman CC Tung.
"Freight rates were low at the start of the year but did recover over the first half and into the second half of 2012. During that period the industry was able to absorb the new capacity being delivered, but by the fourth quarter, the further deterioration in the Eurozone economies and the muted growth in the United States saw a deterioration in both freight rates and load factors as excess capacity chased inadequate demand, resulting in a disappointing end to the year," he said.
Global trade demand growth slowed in the second half, mainly due to depressed imports to North Europe and the Mediterranean which affected the Asia-Europe and transatlantic trades, said the company statement.
"After a strong first half performance and a pleasing third-quarter, OOCL's operating profitability was impacted by the downwards pressure on freight rates during the last quarter of the year. Competitive pressure was most intense on the Asia-Europe trade as carriers sought to maintain volumes despite a reduction in trade levels," said Mr Tung.
"There was some partial offset to this pressure with bunker fuel prices coming down from the very high levels experienced in the first half of the year and remaining stable through and past the year end," Mr. Tung remarked.
OOCL continued to operate the Long Beach Container Terminal in California and the Kaohsiung Container Terminal in Taiwan, with a total throughput of two million TEU in 2012. OOCL also have a 20 per cent interest and management participation in the Tianjin Port Alliance International Container Terminal Co and the Ningbo Yuandong Terminal Ltd with a combined throughput of 4.1 million TEU.
"The year ahead looks as though it will be as difficult as 2012. While economic conditions in the United States are improving, the pace of economic recovery remains slow. Prolonged deflation in Europe has caused a decline in imports from Asia, and with Eurozone economies continuing to struggle, there is a possibility of further contraction," Mr. Tung said.
HONG KONG's Orient Overseas (International) Limited (OOIL), parent of Orient Overseas Container Line (OOCL), posted a 2012 net profit increase of 63.3 per cent year on year to US$296.4 million drawn on revenues of $6.45 billion, up 7.4 per cent.
OOCL liftings increase 3.7 per cent to 5.2 million TEU with revenue per TEU rising 2.9 per cent year on year to $1,131 as operating capacity rose 8.8 per cent to 452,246 TEU, the company said.
"While 2012 was a profitable year for the group, the container transportation market continued to be challenging as the industry struggled to absorb substantial new-build vessel capacity while facing ongoing weak demand growth," said OOIL chairman CC Tung.
"Freight rates were low at the start of the year but did recover over the first half and into the second half of 2012. During that period the industry was able to absorb the new capacity being delivered, but by the fourth quarter, the further deterioration in the Eurozone economies and the muted growth in the United States saw a deterioration in both freight rates and load factors as excess capacity chased inadequate demand, resulting in a disappointing end to the year," he said.
Global trade demand growth slowed in the second half, mainly due to depressed imports to North Europe and the Mediterranean which affected the Asia-Europe and transatlantic trades, said the company statement.
"After a strong first half performance and a pleasing third-quarter, OOCL's operating profitability was impacted by the downwards pressure on freight rates during the last quarter of the year. Competitive pressure was most intense on the Asia-Europe trade as carriers sought to maintain volumes despite a reduction in trade levels," said Mr Tung.
"There was some partial offset to this pressure with bunker fuel prices coming down from the very high levels experienced in the first half of the year and remaining stable through and past the year end," Mr. Tung remarked.
OOCL continued to operate the Long Beach Container Terminal in California and the Kaohsiung Container Terminal in Taiwan, with a total throughput of two million TEU in 2012. OOCL also have a 20 per cent interest and management participation in the Tianjin Port Alliance International Container Terminal Co and the Ningbo Yuandong Terminal Ltd with a combined throughput of 4.1 million TEU.
"The year ahead looks as though it will be as difficult as 2012. While economic conditions in the United States are improving, the pace of economic recovery remains slow. Prolonged deflation in Europe has caused a decline in imports from Asia, and with Eurozone economies continuing to struggle, there is a possibility of further contraction," Mr. Tung said.