Orient Overseas (International) Ltd
Announces 2012 Full Year Results
· Group Revenue increased by 7.4% to US$6,459 million
· Profit After Tax from Continuing Operations of US$297 million
· Profit Attributable to Equity Holders of US$296 million
· Earnings per share of US47.3 cents
· Final Ordinary Dividend of US7.18 cents (HK$0.56) per share
· Lifting increased 3.7% to 5.2 million TEU
· OOCL revenue per TEU was up 2.9% to US$1,131
· No delivery taken for new-build vessel during the year
· Operating capacity rose 8.8% to 452,246 TEU
· Load factor was 73% in 2012 versus 76% in 2011
· EBIT margin improved from -0.2% in 2H11 to 6.0% in 2H12
· Lifting rose by 1.4% from 2.59 million TEU in 2H11 to 2.63 million TEU in 2H12
· OOCL revenue per TEU increased from US$1,075 in 2H11 to US$1,149 in 2H12
· Load factor was 72% in 2H12 versus 75% in 2H11
· Total net debt to equity ratio was 0.12 : 1 at end of 2012
· Liquid assets exceeded US$2.3 billion as at 31st December 2012
· Net debt of US$542 million as at year end of 2012
Orient Overseas (International) Limited and its subsidiaries (the “Group”) today announced a profit attributable to shareholders for 2012 of US$296.4 million, compared to a profit of US$181.6 million in 2011.
Earnings per ordinary share in 2012 were US47.3cents, whereas earnings per ordinary share in 2011 were US29.0 cents.
Having considered the likely operating environment and financial market conditions over the medium term, the Board of Directors recommends the payment of a final ordinary dividend of US7.18 cents (HK$0.56) per share to shareholders for 2012. Combined with the 2012 interim dividend, this represents a total ordinary dividend payout of 25% of the Profit Attributable to Shareholders for 2012.
The Chairman of OOIL, Mr C C Tung, said, “While 2012 was a profitable year for the Group, the container transportation market continued to be challenging as the industry struggled to absorb substantial new-build vessel capacity while facing ongoing weak demand growth. Freight rates were particularly low at the start of the year but did recover over the first half and into the second half of 2012. During that period the industry was able to absorb the new capacity being delivered, but by the fourth quarter, the further deterioration in the Eurozone economies and the muted growth in the United States saw a deterioration in both freight rates and load factors as excess capacity chased inadequate demand, resulting in a disappointing end to the year.”
OOCL’s liftings increased 3.7% year-on-year. Global trade demand growth slowed in the second half, mainly due to depressed imports to North Europe and the Mediterranean which affected the Asia-Europe and Trans-Atlantic trades.
“After a strong first half performance and a pleasing third-quarter, OOCL’s operating profitability was impacted by the downwards pressure on freight rates during the last quarter of the year. Competitive pressure was most intense on the Asia-Europe trade as carriers sought to maintain volumes despite a reduction in trade levels,” noted Mr. Tung.
“There was some partial offset to this pressure with bunker fuel prices coming down from the very high levels experienced in the first half of the year and remaining stable through and past the year end,” Mr. Tung remarked.
OOCL continued to operate the Long Beach Container Terminal in California and the Kaohsiung Container Terminal in Taiwan, with a total throughput of 2.0 million TEU in 2012. OOCL also have a 20% interest and management participation in the Tianjin Port Alliance International Container Terminal Co., Ltd and the Ningbo Yuandong Terminal Ltd., with a combined throughput of 4.1 million TEU.
“The year ahead looks as though it will be as difficult as 2012. More than other industries, container shipping is affected by global economic conditions impacting trade volumes and we expect a further protracted period of low economic growth to continue after the past four years of economic downturn. While economic conditions in the United States are improving, the pace of economic recovery remains slow and consumer demand continues to be muted. Prolonged deflation in Europe has caused a decline in imports from Asia, and with Eurozone economies continuing to struggle, there is a possibility of further contraction before recovery occurs,” Mr. Tung continued.
“Recently higher employment levels in the US manufacturing sector suggests that there may be a trend of “re-shoring” of production in the United States. Combined with the increasing domestic consumer market in China, this may see Chinese manufacturers focusing further on their own domestic markets, resulting in a slowdown China’s export growth rates,” Mr. Tung said.
“With a further increase in new build vessel capacity delivering in 2013, competition and resultant pressure on freight rates will continue to be intense. The industry’s ability to further absorb additional capacity are being tested and there are risks to service levels given the reduced number of loops being run on the major trade lanes,” Mr. Tung added.
In 2012, no newbuilding vessels were delivered, and no new vessel orders were placed. During the year, OOCL exercised an option to purchase one 12-year old 5,560 TEU vessel previously operated under long-term charter, and sold out two 16-year old 5,344 TEU vessels and then time-chartered them back for a 3-year period.
“Flexibility in our operating model to be able to adjust capacity to actual demand levels remains a key focus for OOCL in 2013 as we absorb our new 13,200 TEU vessels. These vessels, delivering in 2013 and 2014, will further enhance OOCL’s competitive cost base as well as helping us to reduce emissions consistent with our focus on and promotion of environmental protection,” Mr. Tung continued.
“OOCL is well placed for the future with its alliance memberships and its continued investment for growth. The Group is well capitalised and has sufficient liquidity and access to funding to meet its future needs. Our outstanding staff continue to be a key element of our superior performance and success, and through their continued efforts, together with our strong financial position, we are confident of our ability to continuing
growing and meeting our goals,” Mr. Tung concluded.
“In terms of environment protection,” remarked Mr. Andy Tung who became the CEO of OOCL in 2012, “with environmental-friendly designed fleet ships, we are in full compliance with the international, national and local emission control regulations. In addition to regulatory compliance, we have been participating in various voluntary programs including the Green Flag Program at the Port of Long Beach, the Vessel Speed Reduction Program at the Port of Los Angeles, the At-Berth Clean (ABC) Fuels Program at the Port of Seattle, the Fair Winds Charter and Port Facilities & Light Dues Incentive Scheme in Hong Kong.”
Mr. Kenneth Cambie, the Group Chief Financial Officer, commented, “As at 31st December 2012, the Group had total liquid asset balances of US$2,339.5 million compared with debt obligations of US$555.8 million repayable in 2013. Debt to equity ratio changed to 0.12 : 1 at end of 2012 compared with 0.06 : 1 at end of 2011.
OOIL owns one of the world’s largest international integrated container transport businesses which trades under the name “OOCL”. With more than 290 offices in 60 countries, the Group is one of Hong Kong’s most international businesses. OOIL is listed on The Stock Exchange of Hong Kong Limited.
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Issued by: Orient Overseas (International) Limited
For further information contact
|Kenneth G Cambie
||Chief Financial Officer
||(852) 2833 3518
||(852) 2833 3167
Internet address: http://www.ooilgroup.com/