Parent of OOCL reports increase in profit

Earnings grow despite decrease in revenue as company benefits from lower fuel prices.    OOIL, parent company of liner carrier OOCL, said it had a profit of $239 million in the first half of 2015, 32 percent more than in the first half of 2014.
   The profit increase came even though revenue was lower–$3.04 billion in the first half of this year compared with $3.2 billion in the first half of 2014.
   C.C. Tung, chairman of OOIL, said “The industry experienced a volatile period during the first half. In the earlier months of 2015, the industry enjoyed a relative stable freight market. Through the combination of the normal seasonal cargo rush prior to Chinese New Year, capacity constraints arising from port congestion and disruptions in the U.S., and an improving cost structure created by lower oil prices, the industry made meaningful gains in margin performance.
   “In the latter half of the reporting period, with idling ships reactivated and new build capacity delivering, freight rates moved rapidly downwards, forcing margins to narrow. It is likely that the industry as a whole will report mixed results for the half year,” he added.
   “Oil prices have remained benign since the sharp drop in third quarter 2014. Despite some upward movements of oil price in the second quarter this year, the prospect of oil reverting to the highs of 2013 and 2014 seems increasingly unlikely”, Tung commented.
   The average price of bunker recorded by OOCL in the first half of 2015 was $352 per ton compared with $595 per ton for the corresponding period in 2014, generating a decrease in fuel costs of 38 percent.
   Compared to the first half in 2014, OOCL liner liftings dropped by 2 percent, load factor by 4 percent, and revenue by 6 percent. Average revenue levels in some trade lanes reached new post-global financial crisis lows, the company said, with an average revenue-per-TEU drop of 4 percent in the first half.