- EPS grows 66%
- Group turnover increased by 12% to US$2.4 billion
- Net profit increased by 67% to US$111.9 million
- Increasing contribution and benefits from IT/logistics businesses
- Property developments begin to produce returns
Orient Overseas (International) Ltd (“OOIL”) today announced a profit after taxation and minority interests of US$111.9 million for the year ended 31st December 2000, a 67% increase over the US$67.2 million recorded for the corresponding period in 1999. The Directors are recommending a final dividend of US3 cents (HK23.4 cents). Together with the interim dividend of US1 cent (HK7.8 cents), this represents a dividend for the year of US4 cents (HK31.2 cents), an increase of 33% over that for 1999.
“Building on the successes of 1999, the Group enjoyed a very successful year in 2000. The International Transportation, Logistics and Terminal division, one of the Group's two principal activities, performed well in all areas despite a significant increase in fuel prices and a softening of the US economy,” said Chairman and Chief Executive Officer Mr. C C Tung. “Our Property Development and Investment division also made a positive contribution, as investments made over a number of years in mainland China began to show returns. We are generally positive for 2001 and see our strengths in China and information technology as an increasingly important competitive advantage.”
Asia continued as the dominant driving force in international containerised trade during 2000. The strong ex-Asia legs of both the Trans-Pacific and Asia/Europe routes produced continued growth in container liftings and revenue levels for OOIL. The weak euro also favoured European exports to North America which was of benefit to the Transatlantic trades.
During the year, the Group took delivery of four new vessels, increasing the total size of the container shipping fleet under operation to 45 vessels. The Group also ordered two further new vessels for delivery in 2003, each with a capacity of 7,400 TEU and secured options on another four similar vessels for delivery in 2004 and 2005. This reflects a generally positive outlook for 2001, despite the recent slowdown in the US economy. Supporting factors include rising European exports, the recovery of the Asian economies, greater stability in fuel prices and falling interest rates.
OOIL has become a leader in the application of information technology in the fields of transportation and logistics, long ago adopting object-oriented technology as the platform for its back office system, IRIS-2. "This has proven far-sighted. The application was considered revolutionary at the time and has allowed us to build enterprise-wide, integrated systems significantly more easily and speedily," said Mr. Tung. He continued, "The time now necessary to complete original application developments, enhancements and maintenance cycles has been reduced to a fraction of what was previously achievable. We are now introducing our applications to the market considerably in advance of our competitors. The initial responses to both IRIS-2 and CargoSmart, the Group’s open and one-stop internet portal, are encouraging. This IT capability allows us to coordinate and integrate the logistical activities of the Group providing the competitive edge upon which we can profitably build our business. This is nowhere more true than in China, where we are already firmly established nationwide."
The Group’s property developments are producing increasingly significant returns. OOIL's domestic housing developments in China have now begun to generate revenues. The Joffre Gardens development in Shanghai was completed during the year and, as at the year end, more than 85% of the units had been sold within the targeted price range. Orient Garden in Hangzhou was fully completed and the units sold on schedule and on target. Pre-sales activities for the new The Courtyards and Century Metropolis developments in Shanghai have been encouraging. These investments in property developments in mainland China are expected to show increasing returns as the different phases of the various joint venture projects come to completion during 2001 and 2002.
Despite its expansion, OOIL continues to maintain a prudent financial position, with a strategic goal of maintaining a net debt equity ratio of less than 1.0. Nicholas Sims, the newly appointed Group Chief Financial Officer, said that the Group’s net debt to equity ratio as at 31st December 2000 was 0.6 compared with 0.4 at 31st December 1999. The increase in indebtedness arose mainly from the finance arranged to support the capital expenditure during the year, notably on the delivery of two new container vessels and new container boxes, together with the need to reclassify certain lease obligations in accordance with changes in the accounting rules.
The Group views 2001 enthusiastically and will continue to build upon its competitive advantages. The emphasis will be placed especially upon the achievement of substantial growth in the international logistics business from the solid foundation already established. Through this initiative and the exploitation of other opportunities the Group will continue its efforts to enhance shareholder value.
OOIL owns one of the world’s largest international integrated containerised transportation businesses and trades under the name OOCL. Its investments are principally in international containerised transportation, container terminal operations, commercial property in New York, business interests in the People’s Republic of China and portfolio investment securities. With more than 160 offices in 50 countries the Group is one of Hong Kong’s most international of businesses. OOIL is listed on The Stock Exchange of Hong Kong Limited.
Issued by: Orient Overseas (International) Limited
