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Issue #590 | Perishables | Mediterranean | Middle East | Africa Trade

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Mediterranean | Middle East | Africa Trade

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2014 Media Kit
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OOIL announces 2007 results

By: | at 08:00 PM | Liner Shipping  

Orient Overseas (International), Ltd. (‘OOIL’) announced a profit of $2.5 billion for the year ended December 31, 2007 compared to the profit of $580.6 million recorded in 2006. The reported profit for year 2007 included a gain of $1.99 billion from the disposal of Terminals Division. Excluding the profit from discontinued activities and investment property revaluation gains, the continuing operations reported a net profit of $553.7 million for the year, compared with $428.3 million for 2006 ’ an increase of 29.3%. There was no valuation surplus on our investment property Wall Street Plaza for the full year 2007 but for 2006, a valuation surplus of $100 million was included. The Directors are recommending the payment of a final dividend of 13.5 cents (HK$1.05) per share. ‘Last year I noted 2006 as being a momentous year with the sale of the Terminals Division and a solid result from the Group’s ongoing business in the face of difficult market conditions. 2007 has proven to be equally important, representing a watershed year for the Group following the completion of the Terminals’ sale. Key events during the year have been the improved profit from operations in our Container Transportation and Logistics business without the Terminals Division; the special dividends paid to shareholders during the year; and the reaffirmation of the Group’s direction,’ said Chairman, Mr. C.C. Tung. ‘A key feature of the container shipping industry in recent years has been the rational allocation of capacity by carriers contributing to lower overall volatility for the industry. With sensible allocation of capacity by the industry continuing in 2007, the stronger sentiment seen at the start of the year translated into maintenance of improving freight rates throughout the year. With overall volume growth and an improvement in freight rates, our ongoing businesses reported an improved performance despite rising costs due to high oil prices.’

‘For our Container Transport and Logistics businesses, 2007 proved a much stronger year than some were predicting at the end of 2006. Despite the US housing sector continuing to slow throughout the year, the effect on the global consumption was muted. The slower volume increase to the US West Coast was mitigated by the strong growth of cargo demand from Asia to Europe. Efficient operation of vessels by carriers in reaction to the high cost of fuel also absorbed capacity. Combined, these factors contributed to a much better balancing of supply and demand of capacity than was predicated for the year. With the strong Euro likely to sustain the current pace of outsourcing to Asia, and the recently announced fiscal and monetary stimulus measures in the United States, we expect much of the same trade pattern and growth of 2007 will continue through 2008.’

‘During the year, we took delivery of two 8,063 teu and three 4,578 teu vessels from Samsung Shipyard. Four new 5,888 teu ships under charter with purchase options were also introduced to the fleet. We expect to take delivery of 3 x 4,506 teu ships from Samsung in 2008. In the fourth quarter of 2007, the Group placed orders with Hudong - Zhonghua Shipyard (Group) Co, Ltd for a total of six newbuild 8,600 teu vessels scheduled for delivery from late October 2010 through to the end of 2011. Based on the existing fleet and orders, these vessels will be the largest in the OOCL fleet when delivered. These orders followed the placing of an order for six 4,500 teu vessels with Samsung Heavy Industries Co Ltd in the first half of the year. During the year our oldest vessel, the OOCL Envoy, was disposed for $9 million. Built in 1979, the ship had a capacity of 2,544 teu,’ said Mr. Tung. ‘For our property development and investment business, as at the end of 2007, the Group had 1.4 million square meters of Total Gross Floor Area under development. Given the complexities of real estate development and investment business in the PRC, we have defined our business to be geographically focused on the Greater Shanghai and Greater Bohai (Beijing / Tianjin) areas over th