Shipping giant OOIL says 2014 profits soared, sees further gains in 2015

Orient Overseas (International) Limited said net profit soared more than five-fold to US$270.5million (HK$2billion) in 2014 from a year earlier as operating costs fell and gains from its property business rose.

Operating costs were cut by 10 per cent in 2014 as oil prices fell and fuel efficiency increased, while Wall Street Plaza, an office building it owns in New York, contributed US$119.4 million to operating income, almost double the year-ago level. A US$9.7 million net fair value gain on the property was also recorded in the past year.

Revenue at OOIL, the holding company of Orient Overseas Container Line, one of the world’s largest container shipping lines, grew 4.7 per cent to US$6.5 billion, as global trade recovered.

“Seaborne trade growth for the liner industry was better than expected during 2014. East-West trades recorded healthy volume growth while the intra-Asia trade posted positive growth. In aggregate terms, global demand grew 5.3 per cent, an improvement from 4.0 per cent in 2013. The industry as a whole performed better than that of 2013, though freight rates across trades were mixed,” said OOIL.

“It is expected that trade growth in 2015 will outperform that of 2014, and bunker cost savings for the industry will become more apparent in 2015,” said the Hong Kong-listed firm in an announcement on Monday morning.

The first quarter of 2015 had seen port congestion problems in Asia and Europe ease and some signs emerge that labour disputes on the US west coast, which had held up shipping trade, are in the process of being resolved, said the shipping giant, which is controlled by the family of former Hong Kong chief executive, Tung Chee-hwa.

“We believe that world economic demand is on a positive trajectory. Notwithstanding the larger order book for delivery in the year 2015, we anticipate gradually improving industry dynamics and margin,” OOIL said.