Monday, August 8, 2011

Container Shipping Group Figures Follow the Trend for Freight and Logistics Sector

OOIL Interim Results Announced
Shipping News Feature

HONG KONG – As is usual at this time of year interim results continue to flood in and the latest figures from container shipping giants Orient Overseas (International) Ltd (OOIL) follow a trend set over the past couple of weeks for that sector of the freight and logistics market. Net profit collapsed by over 86% but principally as a result of factors shown in last years results.

Last year the group showed a profit to June just short of $175 million compared to approaching $1.3 billion last year for the same period but that relied on over $1 billion net from the sale of profit development subsidiary Orient Overseas Development Ltd (OODL), completed in February 2010 OOIL has well over 200 offices worldwide and, along with other similar groups, provides a useful snapshot of the global container freight market.

First half both revenue (+8.6%) and TEU counts (+9.4%) were up for the half year but the increase in revenue, was only around 1.3% for the second quarter against container carriage which was up over 6.5% to 1,258,730 TEU’s showing the deteriorating pattern of freight rates. In the quarter Asia/Europe freight showed a marked decline in profitability with TEU’s up 18% to almost a quarter of a million movements yet revenue decreased by 13%, conversely Trans Atlantic shipping for the company showed TEU carriage up over 8% whilst revenues jumped over 15%.

Full figures can be seen HERE and a company spokesman is reported as saying the recent downgrading of America’s financial status is not expected to materially affect trading conditions in the market whilst OOIL expect slow growth in the US. The Chairman of OOIL, Mr. C C Tung commented:

“The container shipping industry remains extremely competitive with a fine balance between supply and demand that sees rates fall rapidly when new capacity is introduced in an injudicious manner. Improving services for customers so as to attract additional volume and to avoid profitability being unduly sacrificed, is essential given the ongoing cost pressures that all operators face”