OOIL has struggled alongside rivals in an industry-wide slump triggered by weak demand in the United States and Europe, a glut of capacity built during an industry peak in 2007 and 2008, and poor freight rates.
Its shipping unit, Orient Overseas Container Line (OOCL), recorded a loss in the second half of 2011 when freight rates were squeezed further, Ken Cambie, OOIL's chief financial officer, said.
OOIL had been seeking increases in freight rates and "the industry as a whole should break even this year", he told reporters at a results briefing.
Cambie declined to give a profit forecast for this year.
"Looking to 2012, we expect trading conditions to continue to be difficult," OOIL's chairman, Tung Chee Chen, said.
"There has been some freight rate improvement on both Asia-Europe and Trans-Pacific routes since the beginning of the year, but freight rates for those trades do not yet fully cover costs, especially given the increase in the cost of bunker fuel," he said in a statement.
The company's trade within Asia, which contributes about half of OOCL's container liftings, provided a cushion against poor trading conditions on East-West routes.
"We may, however, see a slowing in growth rates for intra-Asia container volume in 2012, as Asian economies are not immune to the slow growth of the export markets of Europe and North America," Tung added.
OOIL managed to make profit last year, while many other liners suffered losses, said Boyong Liu, an analyst at Jefferies Hong Kong Ltd.
"This year, they (OOIL) won't think too much about the market share, about the load factor. They are determined to get the freight rate rise."
Full-year net profit plunged 90 percent to $181.65 million from a profit of $1.87 billion in 2010, when it recorded a $1.0 billion profit from the sale of its China property development business, OOIL said in a statement.
The 2011 earnings, which included a $43 million write-back provision, beat consensus forecasts for a $135.94 million profit from 22 analysts polled by Thomson Reuters I/B/E/S.
Some analysts have said they expect the trading environment to improve this year as more liners withdraw excess capacity and take other measures to counter the downtrend. (Reuters)
