OOCL parent records $401 million loss
Orient Overseas (International) Ltd., (OOIL) the Hong Kong-based parent company of container carrier OOCL, said it had a net loss of $401 million in 2009 compared to a profit of $276 million in 2008.
The company, which reported earnings in U.S. dollars, said revenues for the year was $4.3 billion, 33 percent less than the $6.5 billion in 2008.
Container liftings were 4.16 million TEUs, 14 percent below 2008. Average revenue was $924 per TEU in 2009, down 25 percent from the prior year.
“2009 presented the worst market conditions ever experienced in the container shipping industry,” said C.C. Tung, chairman of OOIL.
“The year opened with a collapse in container freight rates as excess shipping capacity chased a dearth of demand volume,” he said. “An improvement in freight rates occurred in various trade lanes over the second half of the year as capacity in excess of demand was removed and the first tentative signs of a pickup in global economic activity were seen. Unfortunately, the second half of the year also saw increase in energy prices.”
The company said volumes increased later in the year. OOCL carried 8 percent more containers in the second half of 2009 than in the first half of the year.
Tung forecast that “the recovery in the global economy and the pickup in OECD consumer demand are likely to be sluggish. On the supply side, there continues to be an excess of capacity in the form of outstanding newbuild orders and laid-up vessels that will need to be absorbed over the next three to four years.”
He cautioned that “an imprudent reintroduction of capacity currently idling or laid-up, if mismatched to demand, could see fresh rounds of rate cutting.”
OOCL took delivery of five 4,583-TEU ships and scrapped one 3,161-TEU ship in 2009.
Information service Alphaliner ranks OOCL as the world's 13th-largest container carrier. It said the carrier has 73 ships with total capacity of 338,857 TEUs, with 238,642 TEU coming from 40 owned ships and 100,215 from 33 chartered ships. It has 11 ships on order with total capacity of 81,460 TEUs.
The company said it exited the property development sector in China in January, selling Orient Overseas Developments Ltd. for $2.2 billion. The disposal and profit will appear in its 2010 accounts.