• ITVI.USA
    13,714.340
    -40.170
    -0.3%
  • OTRI.USA
    21.930
    0.010
    0%
  • OTVI.USA
    13,686.380
    -35.040
    -0.3%
  • TLT.USA
    2.840
    0.000
    0%
  • TSTOPVRPM.LAXDAL
    2.280
    -0.210
    -8.4%
  • TSTOPVRPM.PHLCHI
    1.900
    -0.070
    -3.6%
  • TSTOPVRPM.LAXSEA
    2.720
    -0.270
    -9%
  • TSTOPVRPM.ATLPHL
    2.480
    -0.170
    -6.4%
  • TSTOPVRPM.CHIATL
    3.070
    -0.210
    -6.4%
  • TSTOPVRPM.DALLAX
    1.370
    -0.090
    -6.2%
  • WAIT.USA
    127.000
    0.000
    0%
  • ITVI.USA
    13,714.340
    -40.170
    -0.3%
  • OTRI.USA
    21.930
    0.010
    0%
  • OTVI.USA
    13,686.380
    -35.040
    -0.3%
  • TLT.USA
    2.840
    0.000
    0%
  • TSTOPVRPM.LAXDAL
    2.280
    -0.210
    -8.4%
  • TSTOPVRPM.PHLCHI
    1.900
    -0.070
    -3.6%
  • TSTOPVRPM.LAXSEA
    2.720
    -0.270
    -9%
  • TSTOPVRPM.ATLPHL
    2.480
    -0.170
    -6.4%
  • TSTOPVRPM.CHIATL
    3.070
    -0.210
    -6.4%
  • TSTOPVRPM.DALLAX
    1.370
    -0.090
    -6.2%
  • WAIT.USA
    127.000
    0.000
    0%
American Shipper

OOIL’s profit slides 11% in 2006

OOIL’s profit slides 11% in 2006

Hong Kong-based Orient Overseas (International) Ltd., parent company of Orient Overseas Container Line, today reported net profit of $581.1 million for 2006, down 10.7 percent from $651.3 million in 2005.

   Group operating profit decreased 10.4 percent to $621.4 million from $693.6 million in the previous year. Group revenue, including revenue from logistics, terminals and property, increased 6 percent to $4.61 billion, compared to $4.35 billion in 2005.

   OOIL’s revenue was boosted by the $2.35 billion sale of its terminals division, comprising four terminals in the ports of Vancouver in Canada and New York and New Jersey, to the Ontario Teachers’ Pension Plan.

   “2006 was a momentous year for the OOIL Group,” said C.C. Tung, OOIL chairman. “Market conditions for container shipping were more difficult than they had been during the three previous years, and yet we have still managed to record what I believe to be an impressive result especially when placed in the environment of generally weaker freight rates and steeply rising costs.”

   The revenue of OOCL, the main operating arm of the group, increased 5.6 percent in 2006 to $4.25 billion. The carrier’s average revenue per FEU dropped 4.5 percent as its container volume rose above revenue growth at 10.5 percent to total 3.89 million TEUs.

   According to AXS-Alphaliner, OOCL ranks as the 11th-largest carrier in the world with a fleet capacity of just under 305,000 TEUs.

   During the year, OOCL received three 8,036-TEU box ships (one in January 2007), four 5,888-TEU ships and two 4,500-TEU vessels. The line’s orderbook comprises four more 8,036-TEU ships to be delivered in 2009 and another four 4,500-TEU vessels due in 2010.

   “For our container transport and logistics businesses 2005 ended and 2006 began in an almost slough of despond,” Tung said. “As has seemed to happen so many times in the past, commentators and forecasters were predicting a very difficult 2006 predicated on a significant disparity between an abnormally high projected supply increase, through an accelerated rate of deployment of new tonnage into all services, and a fall in demand side volume growth as a result of a slowing U.S. economy and its consequent impact upon the remainder of the global economy.

   “On neither side of the equation in the event, did we see these concerns materialize to the extent predicted. However, the annual and seasonal dip in load factors around Chinese New Year were taken to be something they were not and as a result served only to deepen the despondency.

   “Freight rates had been falling and the fall became steeper as a result, most markedly on the Asia-to-Europe trades. On these routes, for which the tonnage increase was forecast to be proportionately the largest, carriers feared lower cargo volumes throughout the year and as a result were far too ready to accept lower freight rates in the attempt to secure volume,' Tung said.

   “The Chinese New Year dip in load factors proved itself once again to be purely temporary in nature, and the pattern for the year became apparent as vessels rapidly filled up, and near 100 percent load factors became the norm for the remainder of the year.

   “Nevertheless, as bitter experience has taught us too many times in the past, whilst falling very fast, freight rates take many months, if not years, to be restored. Only now is this restoration starting to happen. Our other trades also suffered from this general softening of the market with the exception of our transatlantic business. All other trades recorded lower profits for 2006 compared with 2005,” Tung said.

   OOIL will pay a final dividend of 12 cents per ordinary share for 2006 as well as a special dividend of 80 cents per share in recognition of the terminals sale.