This is a legacy page. Please click here to view the latest version.
Mon 13 Mar 2017 08:36

OOIL posts $219m loss, highlights higher H2 bunker prices


Drop in revenue recorded despite a 9.1 percent rise in liftings.



Orient Overseas (International) Ltd (OOIL) - the parent company of Orient Overseas Container Line (OOCL) - posted a loss attributable to equity holders of US$219.2 million in 2016, compared to the previous year's profit of $283.9 million.

Commenting on the loss, OOIL chairman C C Tung highlighted how the rise in bunker prices during the last six months of 2016 had had a negative effect on the business.

"As fuel prices rose in the second half of the year, industry performance was badly affected by freight rates that frequently sank below the levels seen in 2009," Tung noted.

The higher bunker prices contrast with the first half of 2016, when fuel costs decreased by 41 percent compared to the first six months of 2015, and OOCL's average bunker price was $186 per tonne compared to $352 per tonne the year before.

OOIL's revenue in 2016 fell by $655.8 million, or 11 percent, to $5,298 million; this was despite a rise in liftings of 505,000 TEU, or 9.1 percent, to 6.1 million TEU.

Gross profit declined by $425.6 million, or 61.6 percent, to $265.4 million, even though operating costs decreased by $230.2 million, or 4.4 percent.

An operating loss of $138.2 million was recorded in 2016 (compared to an operating profit of $353.1 million the previous year), and a loss before tax of $199.7 million (compared to a 2015 profit before tax of $307.2 million).

"This past year has seen some of the most difficult markets in our industry's history. A combination of steady but low growth in most regions and an overhang of excess supply built up in recent years led to extremely challenging conditions in many trade lanes for most of 2016," Tung observed.

"The financial results reported by the industry as a whole give a clear indication of just how severe conditions became. A quarter-by-quarter or half-by-half analysis of industry results since the middle of 2015 paints a picture of strengthening headwinds," Tung added.

"For the full year 2016, OOCL's liftings were up 9.1 percent, but with a drop in revenue [of 11 percent]. This reflects the challenging environment described above, as does the disappointing financial outcome for the year," Tung remarked.

Discussing the future, Tung said: "Expectations for net growth in 2017 suggest improvement in the situation, but time may be needed to absorb the existing supply overhang.

"While the outlook remains uncertain, we will continue with our long-established strategy. Excellent customer service, operational efficiency, cost management, IT development and scale benefit achieved through alliance membership and careful deployment, all built on solid financial foundations.

"With this approach, and with a more consistent track record than most of the industry, we believe that we can continue to grow successfully, through these challenging times, and into the upturn to come."


Product tanker Artizen, owned by Hong Lam Marine. Hong Lam Marine takes delivery of Artizen tanker in Japan  

Singapore-based firm receives new vessel from Kegoya Shipyard.

Birdseye view of containership. Panama Canal launches NetZero Slot to incentivize low-emission transits  

New reservation category prioritizes dual-fuel vessels capable of using alternative fuels from November.

Van Oord's Vox Apolonia. Van Oord deploys bio-LNG dredger for Dutch coastal project  

First bio-LNG powered trailing suction hopper dredger operation begins in the Netherlands.

Model testing for Green Handy methanol-powered vessel. Methanol-fuelled Green Handy ships pass model tests ahead of 2026 construction  

Baltic carrier reports model testing exceeded performance targets for 17,000 dwt methanol-powered vessels.

Miguel Hernandez and Olivier Icyk at AiP for FPSO. SBM Offshore's floating ammonia production design gets ABS approval  

Design converts offshore gas to ammonia while capturing CO2 for maritime and power sectors.

Philippe Berterottière and Matthieu de Tugny. GTT unveils cubic LNG fuel tank design for boxships with BV approval  

New GTT CUBIQ design claims to reduce construction time and boost cargo capacity.

Wilhelmshaven Express, Hapag-Lloyd. Hapag-Lloyd secures multi-year liquefied biomethane supply deal with Shell  

Agreement supports container line's decarbonisation strategy and net-zero fleet operations target by 2045.

Dual-fuel ship. Dual-fuel vessels will dominate next decade, says Columbia Group  

Ship manager predicts LNG-powered vessels will bridge gap until zero-carbon alternatives emerge.

Stril Poseidon vessel. VPS campaign claims 12,000 tonnes of CO2 savings across 300 vessels  

Three-month efficiency drive involved 12 shipping companies testing operational strategies through software platform.

Birdseye view of a ship. Gard warns of widespread cat fines surge in marine fuel  

Insurer reports elevated contamination levels, echoing VPS circular in early September.


↑  Back to Top