OOIL’s Profit Soars
Hong Kong-based Orient Overseas (International) Ltd (OOIL), the parent company of Orient Overseas Container Line (OOCL), recorded USD 271 million net profit in 2014, a 574% increase compared to USD 47 million reported in 2013, credited to higher revenue and improved cost control.
Revenue increased by 3.5%, from USD 6.23 billion in 2013, to 6.52bn in 2014, followed by a spike in operating costs from USD 5.77bn to USD 5.88bn.
The company’s liner liftings increased by 5.5% to 5.6 million TEUs, with load factor improved to 76% from 73%.
”East West trades recorded healthy volume growth while the Intra-Asia trades posted positive but inconsistent growth. In aggregate terms, global demand grew 5.3%, an improvement from 4.0% in 2013. The Asia-Europe trade saw better-than-expected performance, especially in the earlier part of the year, while those of the Trans-Pacific and Intra-Asia trades were more muted,” said C C Tung, the Chairman of OOIL.
”While carriers faced multiple challenges including port congestion in Asia and Europe, increasing labour and logistics bottleneck in the U.S., and cascading effects in the Trans-Pacific and Intra-Asia trades, the industry benefitted from an overall trade volume growth and declining bunker prices during the year. Compared to the previous year, OOCL average revenue per TEU fell 1.9%. Despite the increase in capacity and lifting, our operating costs continued to improve. A reduction in total bunker cost of 10%, attributable to both decrease in bunker price and consumption, was achieved.”
OOIL took delivery of two 13,208 TEU ‘Mega’ class newbuilding vessels during the year representing a 6.8% increase in net operating capacity from 2013 to 529,662 TEUs. In addition, the company is taking delivery of four 8,888 TEU newbuilding vessels in 2015.
”In respect of 2015 we will see relatively more newbuildings delivered, and a lower level of deliveries in 2016. In the first quarter of 2015, congestions in Asia and Europe have eased, and labour issues on the U.S. West Coast seem to be in the process of being resolved,” said Tung.
”Notwithstanding the larger order book for delivery in the year 2015, we anticipate gradually improving industry dynamics and margin.”