OOCL weathers Q1 challenges to record US$5.1B revenue

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US President Joe Biden says the world's largest ocean carriers raised container shipping rates 1,000% last year. Photo from OOCL
  • OOCL weathers Q1 challenges to record US$5.1B revenue
  • OOCL sees revenue surge 71% year-on-year despite severe congestion along its main routes cutting container volumes by 9.2%
  • Record result follows a bumper 2021 when the group’s profit attributable to equity holders soared 788.63% to US$7.128 billion from US$902.7 million in 2020
  • OOCL to expand container services after it takes delivery in 2023-2024 of twelve 23,000 TEU vessels that are under construction

Orient Overseas Container Line (OOCL) recently reported a 71% year-on-year surge in its first-quarter revenue to US$5.1 billion despite seeing congestion on its main routes.

“This record result was achieved despite severe congestion around the network, which drove down liftings by 9.2% and loadable capacity by 6.5%,” the Hong Kong-listed company said.

Container volumes of the COSCO-owned shipping line declined 9.2% to 1.79 million TEU.

The port congestions led to OOCL’s overall load factor declining 2.6% from the same period in 2021. However, its overall average revenue per TEU increased 88.3% compared with the first quarter last year.

The strong first-quarter followed its spectacular performance in full-year 2021, when profit attributable to equity holders soared 788.63% to US$7.128 billion from $902.7 million in 2020. Earnings per ordinary share in 2021 expanded about 770% to $11.08 from $1.44 in 2020.

The group expects to expand its container services after it takes delivery in 2023-2024 of twelve 23,000-TEU vessels that are under construction. In September 2021, OOCL announced another set of orders for ten 16,000-TEU vessels for a total of $1.576 billion. These will be delivered between the fourth quarter of 2024 and the fourth quarter of 2025.

OOCL said since the middle of 2020, the container shipping industry and the entire supply chain had been facing the impact of pandemic lockdowns, increased demand for services as global economies reopened, overwhelming capacity and causing congestions on routes from Asia to North America.

The record earnings prompted the Board of Directors to recommend a dividend for full year 2021 of 70% of the profit attributable to shareholders of US$4.99 billion. The board proposed payment of a final dividend of $2.61 per ordinary share and a second special dividend of $0.69 per ordinary share for 2021.

“Our results for 2021, which include the highest-ever revenue, liftings and profit figures for our core container shipping and logistics business, surpassed even the outstanding outcome for 2020,” the company said in its results announcement on March 25.

“The financial results were achieved in a context that is entirely without precedent.  The second year of a pandemic that affected every country and every industry, 2021 produced enormous challenges,” OOCL added.