OOCL back in black in first half

OOCL back in black in first half    The Hong Kong-based parent of container line OOCL reported first half operating profit of $287 million Thursday, a major swing from the $219 million the line lost in the first half of 2009.
   OOCL's parent, OOIL, also saw revenue rise significantly, 32 percent to $2.7 billion. The liner division saw revenue increase 38.5 percent to $2.5 billion, while OOCL's container volume rose 11.6 percent to 2.2 million TEUs.
   Headlining liner trade growth was the company's Asia/Europe business, where volume grew 10.9 percent to 371,000 TEUs, and revenue grew 106.4 percent to $603.6 million.
   The carrier's biggest trades — the transpacific and intra-Asia — also saw healthy revenue growth. Transpacific trade in the first half grew 18.6 percent by revenue to $893.9 million, and 4.4 percent by volume to 583,000 TEUs. Intra-Asia trade grew 42.3 percent by revenue to $757 million, and 17.5 percent by volume, 1.1 million TEUs.
   Average freight revenue per TEU for the period was $1,133, a 24.2 percent increase over the loss-making levels of 2009.

Tung

   'Following last year's extremely difficult trading conditions, 2010 started positively for the container transportation sector with an improved supply/demand balance and upward pressure on freight rates,' said OOIL Chairman C.C. Tung. 'Despite the modest pace of the global economic recovery, we have seen rapid growth in demand over the first six months of the year.'
   But the company is moving ahead with caution.
   'While the strengthened demand experienced in the first half of the year has seen a welcome return to profitability for the industry, some caution is warranted to the extent that the demand has been driven by inventory level changes and is not necessarily indicative of actual underlying consumer demand during the period,' Tung said. 'Should second-half demand for consumer products and semi-finished goods prove to be as strong as is being anticipated, conditions for the container industry should remain positive for the remainder of the year and into 2011.

Cambie

   'While it is hoped that initial indications of improved consumer confidence and demand grow, we have yet to see the full effects of the sovereign debt crisis in Europe, of the generally slow growth in (developed) economies, and of the ongoing withdrawal of various governments' stimulus programs. While progress has been made in absorbing the newbuild capacity coming on stream, projected capacity increases continue to exceed forecast demand growth into 2011 and beyond, with the global economic recovery continuing at a subdued pace.'
   The company also benefited from a $1 billion profit on the sale earlier this year of most of its property division.
   'The group is running a high level of liquidity following the sale of (the development division) and will continue to do so while we look for strategic opportunities to expand OOCL's operations in addition to normal organic growth,' said OOIL Chief Financial Officer Ken Cambie.