Orient Overseas International Ltd., the parent company of container carrier OOCL, reported a profit attributable to equity holders of $138 million in 2017, as OOCL experienced “tremendous” growth in both European and U.S.-bound trades.
Orient Overseas International Ltd. (OOIL), the parent company of container carrier Orient Overseas Container Line (OOCL), reported a profit attributable to equity holders of $138 million in 2017 compared with a loss of $219 million in 2016.
The Hong Kong-based company’s operating profit in 2017 totaled $232 million on revenues of $6.1 billion, compared with an operating loss of $138 million on revenues of $5.3 billion in 2016.
Last July, COSCO announced plans to acquire OOIL and COSCO’s shareholders approved the deal in October.
“The economic backdrop for 2017 was more robust than forecasters had expected,” OOIL Chairman C.C. Tung said. “Following a decade of low growth, we saw healthier performance in both GDP and trade volumes across most of the world’s major economies. This was a welcome change after the industry’s low point of 2016. This synchronicity of growth, a rare phenomenon in recent memory, may bode well for the sustainability of the recovery.”
OOCL lifted 6.3 million TEUs in 2017, up 3.6 percent compared with the 6.1 million TEUs carried in 2016. The company also took delivery of six 21,413-TEU containerships in 2017 and early 2018.
OOIL said 2017 was a year of tremendous growth for OOCL in both European and U.S.-bound trades. In the transpacific, container volumes increased 16.3 percent from the prior year, while in the Asia-Europe trade, they rose 19.7 percent.
“One of the cornerstone strategies for many years of the OOIL group has been to work in alliance,” Tung said. “We are now almost into the second year of the Ocean Alliance with COSCO, CMA CGM and Evergreen. Alliance membership continues to deliver meaningful benefits in terms of network and scale, and very much remains part of delivering our growth strategy.”
Tung noted that in the Port of Long Beach, the second phase of the company’s Middle Harbor container terminal commenced operations.
“We are delighted with the progress made so far, and already feel the benefit of greater efficiency through welcome cost gains,” Tung said.
He also said that the company’s OOCL Logistics unit, whose core business is managing the supply chains of large retailers in North America and Europe, developed “steadily and profitably.”
“The goal is to build and grow the business, in what is unquestionably a highly competitive market,” Tung said.
As to the industry outlook this year, Tung said, “Once the large new vessels scheduled to be delivered in 2018 have been brought into service, with a comparatively low order book for 2019 and 2020, and taking into account the improved economic data, we are hopeful that the industry may start to enjoy greater stability than it has done for many years. In the meantime, we maintain a positive, if somewhat cautious, stance.
“Against this gradually improving economic background, and in the context of a consolidating industry, the future for OOIL appears to be promising. We are well placed to continue to grow, and look forward to maintaining our track record of being amongst the most consistently highest performers in the industry,” Tung added.
While the merger has been allowed to proceed by the U.S. Federal Maritime Commission and European Union regulators, the Nikkei Asia Review reported that OOIL officials said approvals from China’s Ministry of Commerce and the National Development and Reform Commission have yet to be granted. Nikkei also said Tung told it that the company is in talks with the Committee on Foreign Investment in the United States (CFIUS) about approval of the transaction.
OOCL parent turns profit in 2017
