Orient Overseas Container Line (OOCL) reported an 84 percent drop in net profit for 2013 as a dismal first half dragged down earnings.
The Hong Kong-based parent of OOCL, Orient Overseas (International) Ltd, posted a net profit of US$47.1 million, well down from the 2012 result of $296 million.
The group's container transport and logistics segment saw profits fall from $196 million in 2012 to $17.6 million in 2013 in a year characterised by supply-demand imbalance.
Announcing the results, acting chief financial officer Alan Tung told reporters ship supply reached 5.7 percent while demand was 4.2 percent. This challenging market saw revenue per TEU drop 6.3 percent.
"The oversupply of vessels put pressure on freight rates. It was not a particularly good year for all carriers," he said.
"The first and second quarters were exceptionally difficult with load factors dropping to 72 percent, but there was a rebound in the second half and the full year load factor was brought to 73 percent."
OOCL is itself nearing the end of a newbuilding programme that has seen the fleet expand its capacity by almost 10 percent in two years.
The group took delivery of eight 13,208 TEU ships and two 8,888 TEU vessels last year. Its strategy is to deploy the largest ships possible on each trade lane to improve competitiveness, and this investment in capacity would continue.
"There is dialogue on-going for another round [of newbuilding]," Tung said, adding that the full effect of the new fuel-efficient vessels added to the fleet would be felt this year.
This would lead to a reduction in unit costs and, given expectations of more favourable market conditions, the group expected an improvement in margins this year.
-
Company DirectoryFreight RateExport RateAgency PartnershipCargo Leads