OOCL parent company doubles profits

OOCL parent company doubles profits    Hong Kong-based Orient Overseas (International) Ltd., parent company of Orient Overseas Container Line, more than doubled its net profit for 2004, reporting a 10-year high of $670.4 million.
   “2004 has exceeded all expectations and we have outperformed 2003, achieving record levels of total liftings, total revenues and margins,” said C.C. Tung, chairman and chief executive officer of OOIL.
   Group operating income soared 94 percent to $699 million from $359 million in 2003. Group revenue, including revenue from logistics, terminals and property, increased 28 percent to $4.1 billion from $3.2 billion.
   “Our Container Transport, Logistics and Terminals division enjoyed an unprecedented trading environment during 2004, as volume growth kept pace with or, indeed, outpaced the rate at which new tonnage was deployed,” Tung said.
   The revenue of OOCL, the main operating arm of the group, jumped 30 percent to $3.6 billion from $2.8 billion in 2003. Carryings increased 22 percent to about 3.3 million TEUs, with all trade routes seeing double-digit growth. The average revenue per TEU moved increased 7 percent to $1,100.
   The combined net profit of OOIL’s container terminals in North America, two in the port of Vancouver and two in the port of New York and New Jersey increased 18 percent to $83 million. Overall throughput increased 10 percent to 1.2 container box throughput volumes last year.
   OOIL will pay a final dividend of 18 cents per ordinary share for 2004, an increase from the final dividend of 11.64 cents last year.
   OOIL did not disclose its profit forecast for this year but Tung said the outlook for the core container transport and logistics businesses remains positive.
   Tung warned that lack of investment on land-based infrastructure is more of a threat to the container shipping industry than potential overcapacity.
   “Evidence shows that tonnage increase estimates are more often than not overestimates since they relate to static slots only and take no account of, for example, changing trade patterns or indeed of the effects of congestion,” Tung said. “This latter problem with which the industry is presently having to contend is due to the lack of investment over the recent past in the land based infrastructure necessary to cope with the higher volume growth levels experienced over the past few years.”
   In 2004, the group took delivery of four 8,063-TEU containerships and ordered six vessels with approximately 4,500-TEU capacities for delivery in 2006 to 2008. It also acquired land in Kunshan, Jiangsu and Huangpu district of Shanghai and signed a letter of intent for terminal investments in Chinese ports of Tianjin and Ningbo.