OOCL parent’s first half profit surges on terminals sale

OOCL parent’s first half profit surges on terminals sale    Hong Kong’s Orient Overseas (International) Ltd., parent company of ocean carrier OOCL, today reported a first half profit of $2.2 billion on the back of the sale of its terminals division to the Ontario Teachers' Pension Plan.
   OOIL’s restated first half 2006 profit was $280.5 million.
   The company’s profit for the six months was buoyed by $1.98 billion from the sale of its four terminals in the ports of Vancouver in Canada and New York and New Jersey, together with a further $25 million revaluation of its Wall Street Plaza investment property. Excluding these non-recurring profit elements, the pre-tax profit was up 12 percent to $229 million compared with $204 million for the corresponding period of 2006.
   OOIL’s first half operating profit dropped 2.7 percent to $298.4 million compared to $306.8 million a year ago. Revenue increased 15.5 percent to $2.51 billion from $2.17 billion.
   OOCL’s average revenue per TEU in the first half went down 3.7 percent despite its container volume increasing 18.8 percent. The shipping line’s revenue in the first half improved 14.7 percent to $2.3 billion.
   'Overall, the markets have remained strong in terms of container volume growth and resilient in terms of freight rates, which in some trades, certainly during the second quarter of 2007, have begun to show signs of a return towards former levels,” said OOIL Chairman C.C. Tung. He added that the Asia-to-Europe, Intra-Asia and Australasian routes showed “particularly strong” growth.
   “The first half of this year in terms of overall performance has been very similar to last year albeit that the relative performances of our various trades have changed. The significant difference however, is that whereas the environment of the first half of 2006 was one of softening freight rates the environment this year is one of strengthening freight rates,” Tung said.
   Looking ahead to the remainder of the year, Tung said the continued “firm” global consumer demand bodes well, and that the emerging economies of the likes of China and India will allow the container shipping industry to balance new tonnage with increased volume demand.
   “We believe that we are currently in an environment of firm freight rates and we look forward to a healthy second half of the year,” Tung said.
   As at June 30, OOIL had cash and portfolio investment balances of $2.75 billion.