Press Release

Hong Kong, 19th March 2010

       Orient Overseas International Announces Results For 2009

·      Revenue decreased 33% for 2009
·      Loss for the Year of US$401 million
·      No final dividend for 2009

 

·       The fair value loss for Wall Street Plaza for the full year was US$25 million
·       The disposal and associated profit of OODL will appear in 2010 accounts
·       The loss for the year was US$401 million for 2009, compared to a profit of US$276 million for 2008
·       Loss per share in 2009 was US60.4 cents versus earnings of US47.1 cents in 2008 excluding discontinued operation

·       Revenue rose by US$220 million or 11% to US$2,285 million in the second half of 2009
·       Loss before Interest and Tax decreased by US$48 million or 27% from US$175M in 1st  Half to US$127M in the 2nd Half
·       EBIT Margin was up 3% to -5.5% in 2H09 from -8.5% in 1H09

·       Total Equity decreased by US$453 million in 2009
·       Liquid Assets exceed US$1.6 billion as at 31st December 2009 (including OODL cash balances)
·       Net Debt of US$1,214 million as at year end

·       Lifting increased by 8% from 2M TEU in 1H09 to 2.1M TEU in 2H09
·       Delivery of five vessels of 4,583 TEU and scrapping one vessel of 3,161 TEU in 2009
·       Reduction of net operating capacity by 16% in 2009 through redelivery of chartered ships to owners

Orient Overseas (International) Ltd. (“OOIL”) today announced a loss of US$400.6 million for the year ended 31st December 2009, compared to the profit of US$275.5 million recorded in 2008.

“2009 presented the worst market conditions ever experienced in the container shipping industry.  The year opened with a collapse in container freight rates as excess shipping capacity chased a dearth of demand volume.  An improvement in freight rates occurred in various trade lanes over the second half of the year as capacity in excess of demand was removed and the first tentative signs of a pick-up in global economic activity were seen.  Unfortunately, the second half of the year also saw increases in energy prices,” commented Mr. C C Tung, the Chairman of OOIL, when announcing the Group’s 2009 financial results.

The container transport and logistics arm of the Group, OOCL, suffered a double-digit decline in lifting in the first three quarters, and stabilized to a 4% drop in the last quarter. Overall, 2009 volume was 14% lower than that in 2008 and revenue was 33% lower.

“The recovery in the global economy and the pick-up in OECD consumer demand are likely to be sluggish,” noted Mr. Tung.  “On the supply side, there continues to be an excess of capacity in the form of outstanding new-build orders and laid-up vessels that will need to be absorbed over the next three to four years.  An imprudent re-introduction of capacity currently idling or laid-up, if mismatched to demand, could see fresh rounds of rate cutting.” 

“The industry’s challenge between short-term cash flow and longer-term stability will test the market’s capacity discipline over the next couple of years until trade growth eventually absorbs the surplus capacity,” Mr. Tung continued. 

On 18th January 2010, OOIL announced the sale of Orient Overseas Developments Ltd (“OODL”) to CapitaLand China (RE) Holdings Co. Ltd. for US$2.2 billion.  The sale was of the PRC property development business conducted under OODL and excluded the investments in Wall Street Plaza and Beijing Oriental Plaza.  With the sale having occurred after year-end, the disposal and associated profit will appear in the 2010 accounts. 

“Our exit from the property development sector in China allows the Group to redeploy capital and to strategically reposition and focus the Group as a well-capitalised container transportation and logistics business,” said Mr Tung. 

“Even with the extremely difficult operating environment in 2009, we held to the Group’s Core Values.  We maintained our commitment to deliver superior customer service, working with our customers to sustain and enhance their supply chains in a rapidly changing environment.  Our commitments to deliver superior customer service to our customers have served us well and our staff rose to the challenge of getting us through the storm in solid financial and operational condition – and in good shape to prosper as the industry recovers over the next two to three years. While 2010 will be another challenging year, our remaining core business of container transportation and logistics remains well placed to endure and emerge stronger from this period of adverse demand and supply dynamics,” concluded Mr. Tung. 

Mr. Kenneth Cambie, the Group Chief Financial Officer, said that “the Group’s net debt to equity ratio as at 31st December 2009 was 0.31 : 1, compared with a ratio of 0.07 : 1 as at the end of 2008.  The Group’s net debt to equity ratio has been further improved with the disposal of OODL in February 2010, making the Group one of the strongest container transport company financially,” he commented. 

OOIL owns one of the world’s largest international integrated containerised transportation businesses and trades under the name OOCL.  With more than 280 offices in 55 countries the Group is one of Hong Kong’s most international of businesses.  OOIL is listed on The Stock Exchange of Hong Kong Limited.

C.C. Tung, Chairman, Orient Overseas (International) Limited

For further information contact
Kenneth Cambie, Chief Financial Officer Tel: (852) 2833 3518 Email: ken.cambie@ooilgroup.com
Stanley Shen, Investor Relations Tel: (852) 2833 3167 Email: stanley.shen@oocl.com
Website address:  http://www.ooilgroup.com/

Note:
(1) The information shown is for reference only (and may be based on data obtained from sources provided by the relevant information provider(s)) and is subject to change without notice. Orient Overseas (International) Limited ("OOIL") and its affiliates and the relevant information provider(s) make no representation and accept no responsibility as to the accuracy, completeness, timeliness and fitness for a particular purpose and expressly disclaims any liability whatsoever for any loss whatsoever arising from or in reliance upon the whole or any part of the information. This information is neither a recommendation, an offer nor solicitation of an offer to buy, sell or trade in any investment. It is not intended to be a statement concerning investment, legal, tax, accounting financial or other professional or expert advice and should not be relied upon as such.
(2) The information may include forward-looking statements about the operations and expected financial results of OOIL and its affiliates. Such statements are inherently subject to uncertainties arising from a variety of factors.