OOIL Massive Profit Leap Mostly Attributable to sale of Terminals

OOIL (Orient Overseas (International) Limited) Group has announced a first half 2007 profit of US$2.2 billion against with $280.5 million earned during the first half of 2006, a more than eight-fold increase, most of which was attributable to the US$1.9 billion sale of its North American container terminals.

"The result included the profit on the sale of the group's former Terminals Division to the Ontario Teachers' Pension Plan Board together with a further $25 million revaluation of the Wall Street Plaza investment property ($75 million as at June last year)," said an OOIL statement.

Turning to shipping, OOIL chairman CC Tung said: "We believe that we are currently in an environment of firm freight rates and look forward to a healthy second half of the year. The first half has been very similar to last year. Whereas the environment of the first half of 2006 was one of softening freight rates the environment this year is one of strengthening freight rates."

OOCL said its total liftings increased by 18.8 per cent for the first half of 2007 year on year. Increases on the Asia to Europe and Intra-Asia and Australasian routes were particularly strong. Total revenues, however, grew by 14.7 per cent to $2.3 billion for the first six months of 2007 as a result of a 3.4 per cent fall in overall revenues per TEU.

The company said the deployment of the last two of twelve new 8,063-TEU "SX" class ships together with the second four of eight new 5,888-TEU "S" class vessels, and the first in the series of "P" class Panamax vessels contributed towards a 20 per cent increase in capacity in the first half.

Despite this increase in capacity, the company said growth was so high in the first half that load factors registered a 0.8 per cent drop year on year. The company deployed new tonnage on stronger trade lanes, thus allowing load factors to remain at "acceptable levels" even in lanes experiencing modest growth.