- Turnover increased by 2.3% to US$1,188 million.
- Liftings increased by 8%.
- Operating profit before tax of US$54.7 million (US$35.2 million last year).
- Profit after taxation and minority interests of US$49.1 million (US$24.2 million last year).
- Earnings per share of US9.5 cents (US4.7 cents last year).
- Interim dividend of US1 cent per ordinary share.
- Four new vessels of approximately 7,700 TEU each in capacity ordered for delivery in 2004.
- One ice-strengthened new vessel of approximately 4,100 TEU ordered for delivery in 2003.
- Property development projects progressed as forecast.
Orient Overseas (International) Limited (“OOIL”) Group today announced a profit before taxation of US$54.7 million compared with US$35.2 million for the same period last year. After taxation and minority interests, the Group reported a profit of US$49.1 million, an increase of US$24.9 million from US$24.2 million in the first half of 2000.
OOIL Chairman and Chief Executive Officer, Mr. C C Tung, said “The result has been achieved due principally to an improvement in the quality of our services, a continued tight control over operating costs, a strong US dollar, lower fuel and interest costs and therefore specifically, a better than expected performance from the international containerised transportation business but also from the property investment and development businesses”.
“As we entered 2001 it was becoming increasingly clear that the growth in both world GDP and international trade was weakening. Volume growth did reduce during the first six months of 2001, which, together with the pressure being exerted by the additional tonnage capacity being deployed, served to exert a downward pressure on freight rates. Importantly however, these factors have been mitigated by the effects of lower bunker costs, lower interest costs and the continued strength of the US Dollar and the weakness of the Euro, Yen and other currencies. Our performance has been further aided by the continuing reduction in our unit costs as a result of the phased delivery and introduction into service of our larger and more fuel efficient newbuilding vessels,” added Mr. Tung.
“Our terminal activities have experienced a slight downturn in throughput during the first half of 2001 as a result of the slowdown of the US economy. Unfortunately also, we have been obliged to make provisions against the doubtful recovery of receivables due from one former customer together with certain other but unrelated costs,” Mr. Tung said.
“The Group’s property investment and development businesses have continued to perform more or less as expected. Wall Street Plaza in New York was fully let for the period and delivered a result better than forecast. In Shanghai, the “Joffre Gardens” project received its occupation permit and handover procedures to buyers began in January. “The Courtyards”, a similar sized residential development, also received its occupation permit in June. Also during the period, Phase 1 of “Century Metropolis” was topped out and Phase 2 is expected to begin sales during the second half of the year. We expect that this property development business will turn in a full year result close to forecast,” said Mr. Tung.
“The slowdown in the US economy, which has now spread to other European economies, the continued economic stagnation in Japan and the consequent economic uncertainties throughout the rest of Asia have all occurred during a period in which the rate of new tonnage being introduced into service is at an all time high. It is a situation which is likely to continue until such time as the rates of GDP growth in the major economies of the world begin to recover towards former levels and the introduction of new tonnage has subsided from 2003 onwards. As the timing of the former is uncertain, the prosperity of international container transportation remains equally uncertain,” commented Mr. Tung.
“As one of the core initiatives in our ongoing search for greater business efficiency we shall continue to develop and extend our IT capabilities”. Mr. Tung said “IRIS-2, our back office system, has changed the way OOCL itself operates by optimising business processes and provides integrated and tailor made logistics solutions to customers at every stage in their supply chain. CargoSmart, our neutral and open software platform, has become the preferred choice of over 500 customers who actively use the portal on a daily basis to manage their logistics needs effectively”.
“We look to these improved processes to gain further operational efficiency as well as customer loyalty to alleviate the impact of the anticipated overcapacity in the near term,” concluded Mr. Tung.
During the period, the Group placed orders for four new container vessels, of approximately 7,700 TEU each, and one ice-strengthened vessel of approximately 4,100 TEU to be delivered during 2003 and 2004.
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 Group Chief Financial Officer said that the Group’s net debt to equity ratio at 30th June 2001 was maintained at the 2000 year end level of 0.6.
The Directors are pleased to announce an interim dividend of US1 cent (HK7.8 cents) per ordinary share to be paid on 28th September 2001 to ordinary shareholders whose names appear on the register of members on 13th September 2001.
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 businesses. OOIL is listed on The Stock Exchange of Hong Kong Limited.
ORIENT OVERSEAS (INTERNATIONAL) LIMITED
