Orient Overseas (International) Limited (OOIL), mother company of box carrier Orient Overseas Container Line (OOCL), announced a profit attributable to equity holders for 2014 of US$270.5 million, compared to US$47 million in 2013, the result of “encouraging industry volume growth in 2014 especially in major East West trades.”
Group revenue rose to $6.522 billion last year, up 3.5% from $6.232 billion the preceding year, while liner liftings increased by 5.5% to 5.6 million TEUs with load factor improved to 76% from 73%. Compared to the previous year, however, OOCL average revenue per TEU fell 1.9%.
OOIL chairman C C Tung said the results were achieved despite a mixed global economic environment that saw the U.S. record a GDP growth of 2.4% for the year “as it appears to have reached a stage of recovery,” and the Eurozone post GDP growth of a disappointing 0.8%, while China booked a slower 7.4% GDP growth but with consumer spending continuing to grow.
Morever, he cited political instability in Eastern Europe and the Middle East, diverging economic performance among the developed nations, and an unexciting growth picture in emerging markets.
“Against this uncertain backdrop, seaborne trade growth for the liner industry was better than expected during 2014. East West trades recorded healthy volume growth while the intra-Asia trades posted positive but inconsistent growth.”
With global demand growing 5.3% in 2014 from 4% in 2013, the industry as a whole performed better than it did in 2013, though freight rate across trades were mixed, said Tung.
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. While carriers faced multiple challenges including port congestion in Asia and Europe, increasing labor 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, Tung continued.
Last year, the corporation took delivery of two new 13,208-TEU vessels from the Geoje shipyard of Samsung Heavy Industries in South Korea, so far the group’s largest container ships.
This year, the group will take delivery of four 8,888-TEU vessels from Hudong-Zhonghua Shipbuilding in China, completing its current orderbook of SX class newbuildings.
The key objective for the company now is to sustain the growth of its logistics business, OOCL Logistics, which has grown to 130 offices in 30 countries. “We expect the logistics business will become a meaningful contributor to the group’s bottom line over the long term,” Tung said.
The company said that it will also continue to work with the G6 Alliance in extending the consortium’s network and “ensuring efficiency, quality and competitiveness.”
On newbuild deliveries, “we will see relatively more newbuildings delivered, and a lower level of deliveries in 2016,” said Tung.
Looking forward, he said that despite the global geopolitical uncertainties, they see a “positive trajectory” in world economic demand, adding that even with the larger orderbook for delivery in 2015, “we anticipate gradually improving industry dynamics and margin.”
