OOIL back in the black with a H1 profit of US$139m despite economic uncertainties
HONG Kong's Orient Overseas (International) Ltd (OOIL), now a Cosco unit, and parent of Orient Overseas Container Line (OOCL), has announced a profit attributable to equity holders of US$139 million for the six-month period ended June 30, 2019, compared to a loss of $10
HONG Kong's Orient Overseas (International) Ltd (OOIL), now a Cosco unit, and parent of Orient Overseas Container Line (OOCL), has announced a profit attributable to equity holders of US$139 million for the six-month period ended June 30, 2019, compared to a loss of $10.3 million for the same period in 2018.
The group's revenue increased by nearly 6 per cent from $3.11 billion from the first six months of last year to $3.30 billion this year.
'In the first half of 2019, despite an economic environment filled with uncertainties, and with seemingly slowing growth in terms of demand for container shipping services, OOIL's financial outcome for the period is a meaningful improvement from the same period last year,' the shipping liner said.
OOCL's container volume during the first half of the year rose 3.2 per cent to 3.37 million TEU from 3.27 million TEU in the same period last year. But revenue levels increased by 6.5 per cent. 'Market growth did indeed slow down in some trade lanes, but in many cases this slow down in volume growth was outpaced by an improvement in the freight rates.'
OOIL said the container shipping industry had been quicker in responding to ever changing demands in its response to the underlying condition of the ever-changing markets and more complicated global economic and trade situations.
'In terms of medium and long-term supply growth, the containership orderbook, as a percentage of the total fleet, is at low levels not seen for more than a decade'.
OOIL pointed out that there are reports that scrapping of vessels had been greater this year than in the same period in 2018, 'a trend that may continue once IMO 2020 low sulphur regulations come in and render older vessels less economic'.
In the short term where reduced levels of demand have caused existing operations to be unprofitable, the industry's supply will have to react quicker to meet the changing demand, OOIL said in a statement.
OOCL Logistics revenue and contribution for the first half of 2019 decreased by 2.1 per cent and 6.9 per cent respectively compared with the same period last year. The contribution from International Supply Chain Management Service decreased by 2.9 per cent due to downsizing of some major retail customers, the shipping liner said.