HONG KONG's Orient Overseas (International) Limited ('OOIL') has announced a profit attributable to shareholders of US$1.36 billion for 2023, drawn on revenues of US$8.34 billion. This compared to last year's profit of US$9.96 billion.
'The exceptionally robust container shipping market during Covid is now far behind us, and we have returned to a rather normal yet uncertain year,' said OOIL, whose principal holding is Orient Overseas Container Line (OOCL).
OOCL's overall revenue in the first quarter of 2024 has fallen nine per cent year on year to $2 billion.
Total liftings rose by 3.4 per cent, while loadable capacity grew by 2.2 per cent. The total load factor was 0.9 per cent greater than the same period in 2023.
But overall average revenue per TEU decreased 12 per cent compared to the first quarter of last year.
The board, of the Cosco unit, recommended a dividend for full year 2023 is 50 per cent be paid to shareholders at US$687 million.
OOCL reported a nine per cent drop in first-quarter revenue as an increase in overall volume was offset by lower rate levels, a familiar quarterly trend throughout the correcting container shipping market last year that has spilled into 2024.
In an operational update for the first quarter - no profit or loss figures were provided - OOCL said Q1 volume increased 3.4 per cent year over year to 1.79 million TEU. But a 12 per cent decline in average revenue per TEU dragged the carrier's overall revenue down to $1.98 billion in the quarter.
The cargo demand recovery was not as strong as anticipated, affected by high inflation, slowdown in economic growth of advanced economies, as well as the consumer spending patterns shifting post-Covid, it said.
'As carriers' schedule became more reliable, retailers opted towards a just-in-time approach when restocking, thereby delaying demand to a certain extent,' said the ooil statement.
'So far, we have taken delivery of seven newly built 24,188-TEU ships. Their delivery will not only help to increase the capacity and also realise the group's endeavours to modernise its fleet from a technology and configuration standpoint, improving its cost-effectiveness and market competitiveness,' said the OOIL statement.
Cooperation with fellow members of the Cosco Shipping and alliances helps to further expand OOIL's network, strengthen cost management capabilities, and contribute to the group in increasing revenue and reducing expenditure.
'Looking ahead,' said the company statement, 'the shipping market remains uncertain. The global economy seems to be recovering, but the pace may be slow and with uncertainties; interest rates on the other hand seem to have peaked, but remain hovering at high levels; the 2M alliance will be terminated, Gemini Corporation emerged, and Ocean Alliance announced further extension; geopolitical tensions and new environmental regulations, including the EU carbon tax, etc, have posed challenges to the entire supply chain. There is no doubt that all these will have a long-lasting impact on the future development of the shipping market.'
Of the war risk in the Red Sea, OOIL said: 'With the tension in the Red Sea not being relieved, shipping companies will continue to navigate through the Cape of Good Hope in the coming months. In combination with the traditional peak season prior to Chinese New Year, freight rates have risen even more.'
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'The exceptionally robust container shipping market during Covid is now far behind us, and we have returned to a rather normal yet uncertain year,' said OOIL, whose principal holding is Orient Overseas Container Line (OOCL).
OOCL's overall revenue in the first quarter of 2024 has fallen nine per cent year on year to $2 billion.
Total liftings rose by 3.4 per cent, while loadable capacity grew by 2.2 per cent. The total load factor was 0.9 per cent greater than the same period in 2023.
But overall average revenue per TEU decreased 12 per cent compared to the first quarter of last year.
The board, of the Cosco unit, recommended a dividend for full year 2023 is 50 per cent be paid to shareholders at US$687 million.
OOCL reported a nine per cent drop in first-quarter revenue as an increase in overall volume was offset by lower rate levels, a familiar quarterly trend throughout the correcting container shipping market last year that has spilled into 2024.
In an operational update for the first quarter - no profit or loss figures were provided - OOCL said Q1 volume increased 3.4 per cent year over year to 1.79 million TEU. But a 12 per cent decline in average revenue per TEU dragged the carrier's overall revenue down to $1.98 billion in the quarter.
The cargo demand recovery was not as strong as anticipated, affected by high inflation, slowdown in economic growth of advanced economies, as well as the consumer spending patterns shifting post-Covid, it said.
'As carriers' schedule became more reliable, retailers opted towards a just-in-time approach when restocking, thereby delaying demand to a certain extent,' said the ooil statement.
'So far, we have taken delivery of seven newly built 24,188-TEU ships. Their delivery will not only help to increase the capacity and also realise the group's endeavours to modernise its fleet from a technology and configuration standpoint, improving its cost-effectiveness and market competitiveness,' said the OOIL statement.
Cooperation with fellow members of the Cosco Shipping and alliances helps to further expand OOIL's network, strengthen cost management capabilities, and contribute to the group in increasing revenue and reducing expenditure.
'Looking ahead,' said the company statement, 'the shipping market remains uncertain. The global economy seems to be recovering, but the pace may be slow and with uncertainties; interest rates on the other hand seem to have peaked, but remain hovering at high levels; the 2M alliance will be terminated, Gemini Corporation emerged, and Ocean Alliance announced further extension; geopolitical tensions and new environmental regulations, including the EU carbon tax, etc, have posed challenges to the entire supply chain. There is no doubt that all these will have a long-lasting impact on the future development of the shipping market.'
Of the war risk in the Red Sea, OOIL said: 'With the tension in the Red Sea not being relieved, shipping companies will continue to navigate through the Cape of Good Hope in the coming months. In combination with the traditional peak season prior to Chinese New Year, freight rates have risen even more.'
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