OOIL profit slips 11pc on high fuel and low freight rates
Orient Overseas (International) Ltd profit fell 11 per cent in 2006 to US$580.6 million from the US$650.85 million in 2005 while turnover increased 6.08 per cent to US$4.61 billion, reflecting the company's 10.5 per cent rise in container volume last year.
OOIL blamed the profit loss on higher fuel costs and lower freight rates. In 2006, the average freight rate dropped 4.5 per cent while fuel prices - 15 per cent of operating costs - increased 22 per cent to US$570 million.
Property profits played a larger role, up seven fold to US$113.25 million after a US$100 million gain in property revaluation.
In November 2006, OOIL reached agreement to dispose of its North American container terminals to Canada's Ontario Teachers' Pension Plan. Excluding the result of the group's terminals division, its continued operations had a net profit of US$528.3 million in 2006, down 14 per cent from US$615.2 million in 2005.
Nicholas Sims, chief financial officer, said net debt to equity ratio as at 31st December 2006 was 0.33:1, compared with 0.24:1 at end of 2005, as a result of new borrowings incurred against the newbuildings delivered and ordered during the year.
The group, Mr Simms said, intends to ensure that no undue burden is placed upon the company's financial position as new vessels are delivered over the next few years.
OOIL blamed the profit loss on higher fuel costs and lower freight rates. In 2006, the average freight rate dropped 4.5 per cent while fuel prices - 15 per cent of operating costs - increased 22 per cent to US$570 million.
Property profits played a larger role, up seven fold to US$113.25 million after a US$100 million gain in property revaluation.
In November 2006, OOIL reached agreement to dispose of its North American container terminals to Canada's Ontario Teachers' Pension Plan. Excluding the result of the group's terminals division, its continued operations had a net profit of US$528.3 million in 2006, down 14 per cent from US$615.2 million in 2005.
Nicholas Sims, chief financial officer, said net debt to equity ratio as at 31st December 2006 was 0.33:1, compared with 0.24:1 at end of 2005, as a result of new borrowings incurred against the newbuildings delivered and ordered during the year.
The group, Mr Simms said, intends to ensure that no undue burden is placed upon the company's financial position as new vessels are delivered over the next few years.
