Thursday, August 5, 2010

2009 Becoming A Bad Memory As Shipping Container Volumes Rise

OOCL Report TEU Totals up and Healthy Interim Figures
Shipping News Feature

HONG KONG - Orient Overseas (International) Limited and its subsidiaries including Orient Overseas Container Line (OOCL) today announced a profit attributable to equity holders of US$1,284.6 million for the six month period ended 30th June 2010. OOCL carried 39% more containers in the period whilst the new rate increases, covered here fully in the past few months, held up to further boost the figures.

An operating profit which jumped 262% from a loss of around $190 million to a profit of $310 million demonstrates the strength of the company’s recovery. A net profit of over $1 billion on the$2.2 billion sale of Orient Overseas Developments Limited (OODL), the group’s property arm, to CapitaLand China (RE) Holdings Co. Ltd. was a huge bonus for Orient but even before this Orient Overseas chalked up a $287 million profit against losses of almost $220 million in the same period last year and the container shipping line OOCL say their liquid assets held were close to $4 billion at the end of June.

Assets include nine new containerships which the company took delivery of in the past few months with capacities of between 4578 and 8063 TEU’s each completing outstanding orders with the Samsung Heavy Industries Co Ltd in South Korea. The company still has outstanding orders for six 8,600 TEU vessels from Hudong – Zhonghua Shipyard (Group) Co. Ltd, which will be delivered between 2011 and 2013.

Commenting on current conditions in the container shipping market OOIL Chairman Mr. C C Tung noted :

“While the strengthened demand experienced in the first half of the year has seen a welcome return to profitability for the industry, some caution is warranted to the extent that the demand has been driven by inventory level changes and is not necessarily indicative of actual underlying consumer demand during the period. Should second-half demand for consumer products and semi-finished goods prove to be as strong as is being anticipated, conditions for the container industry should remain positive for the remainder of the year and into 2011.”

The biggest recent trade jump has been in the Asia to Europe sector where container revenue rose in the second quarter by 128.7% on an increase of 11.5% in TEU numbers against 2009 totals. This helped overall shipping revenue to rise year on year by 38.5% from $1.8 billion to $2.5 billion. The combination of an increase in container numbers coupled with a return to a practical rate tariff after the panicked, fire sale mentality which was occurring a year or so ago, seems to have steadied the ship, at least for OOCL.