- Net profit increased by 536% to US$329 million from US$51.7 million
- Group turnover US$3.24 billion, a growth of 31.9%
- Took delivery of two SX class vessels and one Ice class vessel
- Four new SX class vessels ordered for delivery in 2006 and 2007
- Container terminals in North America were all profitable
- Property developments continue to produce profits
- Final dividend of US12.8 cents (HK$1) per share
- Proposed bonus issue of shares on the basis of one(1) bonus share for every ten (10) existing issued ordinary shares. Board lot to be reduced to 1,000 shares
Orient Overseas (International) Ltd ("OOIL") today announced a profit after taxation and minority interests of US$329.0 million for the year ended 31st December 2003, a 536% increase over the attributable profit of US$51.7 million recorded in 2002. The Directors are recommending a final dividend of US12.8 cents (HK$1) per share.
The Directors are also recommending a bonus issue of shares on the basis of one(1) bonus share for every ten(10) existing issued ordinary shares and have resolved to change the board lot size for trading in OOIL shares from 2,000 to 1,000. Further announcement will be made by the Company setting out the time table, trading arrangement and other details of the change in the board lot size.
"2003 has turned out to have been one of if not the best year to date for the container liner industry. To the surprise of most, and from very uncertain beginnings, the market gathered strength at an unprecedented pace during the course of the year. At the interim stage of 2003 I voiced concerns that the nascent recovery of the world’s major economies remained frail and that the significant increases in both container liftings and average freight revenues during the first half of 2003 were greatly assisted by the weakness of the comparable period of 2002 and might not be sustained into the second half of the year. These concerns turned out to have been unfounded with the growth in volumes and the increase in rates having, in the event, accelerated during the second half of 2003," said Chairman and Chief Executive Officer Mr. C C Tung.
"Our International Transportation, Logistics and Terminals division enjoyed an unprecedented trading environment during 2003 as we experienced a much better supply and demand balance despite the substantial growth in capacity. All trade routes achieved an appreciable improvement in performance during the course of 2003 as volumes rose significantly and freight rates for most routes continued their strong recovery. Overall liftings for OOCL rose by 18.7% to 2,687,545 TEU which, combined with a 15.1% recovery in average revenues per TEU, resulted in a 36.6% increase in total revenues to US$2.8 billion."
During the year, the Group took delivery of two "SX" class new vessels of 8,063 TEU each and a 4,402 TEU ice-strengthened vessel. Simultaneously, our former 2,330 TEU ice-strengthened vessel was delivered to her new owners under a pre-existing contract of sale. The Group had also took delivery of four new vessels of 2,762 TEU each under long-term charter. In 2003, the Group placed order for further four 8,063 TEU "SX" class new vessels for delivery in 2006 and 2007. Including the eight "SX" class vessels ordered in 2000, 2001 and 2002, the Group has in total twelve "SX" class new vessels. Two had been delivered in 2003, four will be delivered in 2004 and two will be delivered during each of the first halves of 2005, 2006 and 2007. The Group also committed to long-term charterparty arrangements under which a series of eight 5,888 TEU new vessels will be delivered, one in late 2005, three in early 2006, one in late 2006 and the remaining three during the first half of 2007.
Our container terminal businesses in North America were all profitable for 2003. For various reasons this represents the first time that they have all been profitable in the same year. Overall, the four terminals, two in the Port of New York and New Jersey and two in the Port of Vancouver, achieved an increase of just over 7% in throughput, in terms of actual lifts, and an 11% rise in revenues per container handled. This translates into a 133% increase in net recurrent pre-tax income although this figure is distorted by the swing from loss to profit at Global Terminal in New York.
During 2003 we have continued the development and scope of our automated IT platforms. Major enhancements have been made to IRIS-2, our enterprise system, to include interface capabilities with CargoSmart, e-Payment and Scheduling Smart, and to cater for Bills of Lading and Manifests issued by N.V.O.C.C.s. In 2003, CargoSmart Limited, a provider of one of the most advanced portals for the ocean container transportation industry, continued to strengthen its product range by adding and enhancing features that complete the basic shipment cycle from booking through to invoicing, thereby extending its service to help a broader segment of customers and their associates manage their shipments across multiple carriers.
OOCL Logistics is the Group’s logistics management division. Founded as a global freight services provider, OOCL Logistics today is a major global 3PL (Third Party Logistics Provider) as well as an LLP (Lead Logistics Provider). OOCL Logistics is focused on end-to-end logistics solutions that maintain a high level of customer satisfaction through consistent service quality.
Our Property Development and Investment division returned a solid year in 2003. Despite the numerous issues arising due to SARS, the results of our development portfolio in Shanghai remained satisfactory. This can be attributed to both the experience of the local development team and the continued brand name premium we have established in Shanghai. In addition, we began during the year to expand our horizons a little to areas immediately outside the Shanghai City limits, efforts which we believe will make a valuable contribution to the Group going forwards. For our property investment business, we continue to believe that both China’s entry to the WTO and the gradual build up to the 2008 Olympic Games will slowly but surely benefit all sectors of the Beijing property market. Beijing Oriental Plaza, in which the Group continues to hold an 8% interest, has yielded a modest but positive result at the project level for the financial year ended December 2003. During 2003, the Group increased its percentage freehold ownership of the land underlying Wall Street Plaza from 66% to 95% at a cost of US$10 million. The gradual recovery in the New York property market has benefited Wall Street Plaza, and we look forward to its continued and positive contribution to Group performance.
"The outlook for our core international transportation and logistics businesses remains positive. During the course of 2003 the supply and demand balance moved firmly in our favour and at the present time it is hard to find any data to suggest that this favourable situation will alter in the near term. The present situation, unique it seems, is that with all sectors of the shipping industry having of late been enjoying exceptional levels of performance, the shipyard order books are virtually full for probably the next 3.5 years. As such the supply side increases are fixed for a period much longer than is usually the case. With greater confidence therefore on the supply side, concern has now switched more to the demand side and the sustainability of the recent levels of container volume growth. China’s accession to the WTO, the continuing processes of containerisation and the return to higher levels of global economic growth all tend to suggest that the presently better supply and demand balance is set to remain with us for 2004 and perhaps beyond," concluded Mr. Tung.
Nicholas Sims, the Group Chief Financial Officer, said that the Group’s net debt to equity ratio as at 31st December 2003 was improved to 0.38, compared with that of 2002, and it remains one of the Group’s strategic goals to maintain this ratio at a level below 1.0. Sufficient resources have been set aside to ensure that no undue burden is placed upon the Group’s financial position as new vessels are delivered over the next few years.
OOIL owns one of the world’s largest international integrated container transport businesses and trades under the name OOCL. Its investments are principally in international container transport, logistics 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
For further information contact
Nicholas Sims Chief Financial Officer (852) 2833 3518
Stanley Shen General Manager/Corporate Marketing (852) 2833 3167
Internet address : http://www.ooilgroup.com
