Orient Overseas sales up in Q3

Updated: 2010-10-22 08:17

By Li Tao(HK Edition)

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Orient Overseas sales up in Q3

Shipping firm benefits from rebound in global trade

Orient Overseas (International) Limited (OOIL) filed a report Thursday stating that its revenue rose 65.5 percent year-on-year to $1.57 billion in the third quarter. Meanwhile, total cargo transport grew 16 percent to 1.23 million twenty-foot equivalent units (TEUs) in the period ended September 30.

OOIL, an investment holding company, is the parent firm of the city's largest container shipping firm, Orient Overseas Container Line (OOCL). The average revenue per TEU also increased 42.6 percent.

"Orient Overseas' sales growth far overtook its shipping volume in the third quarter, which well reflected the continued recovery of the whole container shipping industry," Kenny Tang, executive director at Redford Securities, said in a report.

Global trade in volume terms is expected to grow more than 10 percent this year, Pascal Lamy, director-general of the World Trade Organization said in July, upgrading the forecast from a previous projection 9.5 percent made in March.

This is good news for the container shipping industry, which was hit hard during the financial cris, racking up total losses of more than $15 billion in 2009, according to a report by the Paris-based information service AXS Alphaliner earlier this year.

The slowdown in global trade also led to a steep drop in freight rates in the latter part of 2008, with most shipping operators recording losses despite attempts to lower costs by cutting capacity and deferring new ship orders.

However, Orient Overseas returned to the black in the first half in 2010, posting interim profit results of $287 million after tax on August 5. Sales increased by 32 percent or $667.5 million in the first six months to $2.73 billion as US demand for Asian-made products were given a boost and freight rates on Asia-Europe routes nearly doubled.

OOIL also more than doubled its sales revenue from Asia-Europe routes in the third quarter to $354 million compared with $174 million a year ago. Trans-Pacific routes also received a revenue sweetener in the third quarter, up 69 percent compared with a year ago at $600 million.

For the first nine months of the year, aggregate sales climbed 48 percent to $4.1 billion while cargo loads rose 13 percent to 3.5 million TEUs compared with the corresponding period in 2009.

China Daily

(HK Edition 10/22/2010 page3)