Hong Kong-based Orient Overseas (International) Limited, a parent company of Orient Overseas Container Line (OOCL), reported USD 238.6 million net profit for the six-month period ended June 30, 2015, a 32% jump compared with USD 181.3 million for the same period in 2014, despite a dip in revenue.
OOIL’s revenue for the first six months of 2015 was USD 3.04 billion, a 6% drop compared to USD 3.24 billion revenue for the same period a year earlier. However, the company says that the dip in revenue was offset mostly by OOCL’s lower bunker costs.
The average price of bunker recorded by OOCL in the first half of 2015 was USD 352 per ton compared with USD 595 per ton for the corresponding period in 2014, generating a decrease in fuel costs of 38%.
Lower bunker bills also helped offset OOCL’s drop in liftings and revenue. The container line handled 1,422,408 TEUs in 1HFY2015, a 2.1% drop compared to 1,453,193 TEUs handled in 1HFY2014. The company’s revenue dropped 9.3% for the period, from USD 1.5 billion in 1HFY2014, to USD 1.36 billion in 1HFY2015.
Average revenue levels in some trade lanes reached new post-global financial crisis lows, with an average revenue per TEU drop of 4% in the first half, OOIL says.
Commenting on the outlook in the container shipping market, the Chairman of OOIL C C Tung, said: ”The industry faces a large orderbook in the year 2015. Until sustainable demand growth is achieved, freight rates will continue to be under pressure. Looking into the second half and into next year, the industry takes comfort that scheduled new deliveries are relatively limited in 2016, and is hopeful that cargo growth, especially in Asia Europe and Intra Asia, will recover a more favourable trajectory. During the next six months, where revenue remains uncertain given the supply and demand imbalance, cost efficiency remains the critical factor for better margin performance. The industry is hopeful that positive trade growth, especially in the Trans-Pacific and Trans-Atlantic trades, and to a degree in the Intra-Asia trade, will provide support to the underlying market.”