[240320.EN.SEA] OOIL Profit Up 1,149pc On US$1.15 Billion Long Beach Terminal Sale

ORIENT Overseas (International) Limited (OOIL) and its subsidiaries, principally Orient Overseas Container Line (OOCL), has announced a net profit increase of 1,149 per cent to US$1.34 billion in 2019 partly based on year-on-year revenues of $6.87 billion augmented by $1.15 billion from the sale of its Long Beach container terminal.

OOIL, now a Cosco unit, said its balance sheet has been one of the most robust in the container shipping industry.

"This strength has been boosted in 2019 by year-on-year improvements in operating cash inflow, which increased from $589.7 million in 2018 to $753.4 million in 2019, and in our earning before insurance and taxes [EBIT], which increased from US$313.7 million in 2018 to US$452.3 million in 2019," said the company statement accompanying results

"It is particularly pleasing to note that this solid performance was achieved in a context of an uncertain global economic and trade environment. Economic growth in most major economies continued to be low, and seemingly escalating trade frictions gave rise to uncertainty throughout the year." said OOIL.

"We continued to enjoy significant synergy benefits in 2019. Indeed, our original synergy targets established during the acquisition process have already been exceeded, and our teams continue to work hard to identify and exploit further areas where synergy benefits may be obtained. These highly tangible benefits, achieved through effective network planning, equipment management, joint procurement and co-operation in IT, will be a key success factor for our group in 2020 and beyond.

"For many years, the OOIL balance sheet has been one of the most robust in the container shipping industry. This strength has been boosted in 2019 by year-on-year improvements in operating cash inflow, which increased from US$589.7 million in 2018 to US$753.4 million in 2019, and in our EBIT, which increased from US$313.7 million in 2018 to US$452.3 million in 2019.

"In 2019, global economy had only 2.9 per cent growth which was the lowest level since 2008-09. The uncertainties of the on-going US-China trade discussions and Brexit further hampered economic growth.

"In container shipping industry, global demand growth in 2019 was only 2.6 per cent, half of the growth in 2018. The global supply growth was four per cent. However, effective supply growth was contained during the year because of few new vessels entering the market and the increase in the number of idled vessels, some of which were idled for the purpose of retrofitting scrubbers.

"OOCL total liftings grew by 3.8 per cent and total revenue growing by 5.2 per cent. We will continue this steady growth, and it is in this context that we have decided to implement the ship renewal plan that was made five years ago, by ordering five new building vessels," said the company statemment," said OOIL.

Source : HKSG.