OOIL announces 2019 interim results
Orient Overseas (International) Limited and its subsidiaries announced a profit attributable to equity holders of US$139.0 million for the six-month period ended 30th June 2019, compared to a loss of US$10.3 million for the same period in 2018.
Earnings per ordinary share for the first half of 2019 was US22.2 cents, whereas loss per ordinary share for the first half of 2018 was US1.6 cents.
In the first half of 2019, despite an economic environment filled with uncertainties, and with seemingly slowing growth in terms of demand for container shipping services, OOIL’s financial outcome for the period is a meaningful improvement from the same period last year, and represents a pattern of steady progress in results throughout the second half of 2018 that continued through the first half of 2019.
Compared to the first half of 2018, OOCL liner liftings increased by 3.2%, but revenue levels increased by 6.5%. Market growth did indeed slow down in some trade lanes, but in many cases this slow down in volume growth was outpaced by an improvement in the freight rates.
The average cost of bunker recorded by OOCL in the first half of 2019 was US$441 per ton compared with US$403 per ton for the corresponding period in 2018. The rise in both the fuel oil and diesel oil price has resulted in the increase of bunker costs by 3% in the first half of 2019 compared with the corresponding period last year.
In the first half of 2019, no new-build vessel was delivered, and no new order was placed by the Group. Currently, the six 21,413 TEU G-Class vessels delivered in 2017-2018 are among the largest containerships in our fleet.
OOCL Logistics revenue and contribution for the first half of 2019 decreased by 2.1% and 6.9% respectively compared with the same period last year. The contribution from International Supply Chain Management Service decreased by 2.9% due to downsizing of some major retail customers. Contribution from Import/Export Services decreased by 4.5%. The contribution of depot business dropped by 21.5% due to tariff rate reduction. Lowering utilization of existing warehouses during the transition of replacing loss-making customers and large startup cost of new warehouses, as well as fierce price-cutting competition in transportation business were all key activities contributing to the 16.0% drop in Domestic Logistics contribution.
CargoSmart has announced the execution of Global Shipping Business Network (“GSBN”) Services Agreements with various Maritime Industry operators to accelerate the digital transformation of the industry. GSBN initial preparatory efforts to explore and test the feasibility and value of using blockchain technologies are underway and showing promise.
The continuing growth of the Group and its good trading performance, together with achieving the projected synergy benefits, will drive even greater success. Together, with the OOCL “We take it personally” spirit, a world-class container shipping integrated service provider is being built, which is a goal that will surely provide great benefit to shareholders, customers and employees alike.
As at 30th June 2019, the Group had total liquid assets of US$1,988.5 million compared with debt obligations of US$618.3 million repayable within one year. The net debt to equity ratio remained low at 0.41 : 1 as at 30th June 2019. The Group from time to time prepares and updates cashflow forecasts for asset acquisitions, to serve project development requirements, as well as working capital needs, from time to time with the objective of maintaining a proper balance between a conservative liquidity level and an effective investment of surplus funds.
OOIL owns one of the world’s largest international integrated container transport businesses which trades under the name “OOCL”. With more than 370 offices in over 80 countries/regions, the Group is one of Hong Kong’s most international businesses. OOIL is listed on The Stock Exchange of Hong Kong Limited.
