Orient Overseas (International) Limited and its subsidiaries announced profit after tax and non-controlling interest attributable to equity holders of US$175.0 million for the six month period ended 30th June 2011. The profit for the same period in 2010 was US$1,284.6 million which included US$1,004.4 million profit on the sale of the Group’s PRC property development business. Excluding that profit element, the 2011 interim result represents a US$105.3 million or 38% decrease in earnings from comparable activities, OOIL said on Monday.
The profit after tax and non-controlling interests attributable to equity holders for the first six months of 2011 includes a revaluation US$5 million of Wall Street Plaza to reflect an independent assessed market value for that property of US$160 million as at 30 June 2011. There was no revaluation gain or loss for Wall Street Plaza in the
equivalent 2010 interim period.
Earnings per ordinary share for the first half of 2011 were US28.0 cents, whereas earnings per ordinary share for the first half of 2010 were US205.3 cents of which US44.8 cents per share were from comparable continuing operations.
The Board of Directors is pleased to announce an interim dividend for 2011 of US7.0 cents (HK54.6 cents) per ordinary share. The dividend will be paid on 7th October 2011 to those ordinary shareholders whose names appear on the register on 7th September 2011.
OOCL took delivery of just one new-build vessel, the OOCL Beijing, during the first half of 2011- being the first 8,888 TEU vessel from Hudong-Zhonghua Shipbuilding. A second unit of the same series, the OOCL Canada, was delivered in July.
Mr. Kenneth Cambie, the Group’s Chief Financial Officer, noted that “The delivery of remaining six 8,888 TEU vessels on order from Hudong-Zhonghua Shipbuilding will be completed by 2014. Currently all vessels in our fleet, including these new additions, are fully deployed in our services. During the first half of 2011, OOCL placed orders for ten 13,208 TEU vessels from Samsung Heavy Industries for delivery in 2013 and 2014. Though it is not yet a regulatory necessity, the design of these vessels has already taken into account impending IMO energy efficiency requirements.”
Wall Street Plaza continues to perform in line with expectations, and based on an independent valuation, it has been re-valued upwards by US$5 million as at 30 June 2011 to reflect an assessed market value of US$160 million.
In April this year, Beijing Oriental Plaza was successfully floated publicly via a Real Estate Investment Trust (“REIT”). The Group’s interest in Beijing Oriental Plaza is indirect, via investment in its ultimate parent, Hui Xian Holdings. The Group’s holding in Hui Xian Holdings has been revalued as at 30 June 2011 to US$173.6 million.
Mr. Tung commented on the outlook in the container shipping market, “The late introduction of peak season surcharges on the Trans-Pacific trade, despite reasonable levels of demand, is an indicator of the difficult trading conditions expected for the remainder of the year. Capacity deployment issues in the industry are likely to continue in the near term, and the traditional peak season lift in demand may give only limited improvement, at best, in average freight rates over the remainder of the year. There is uncertainty as to how strong consumer demand in the United States will be over the Thanksgiving & Christmas retail selling seasons this year following the recent termination of the US Government’s fiscal and monetary stimulus programs.”
“While the economies of northern European countries are performing well, the support needed for those members of the Euro-zone with excessive levels of sovereign debt may constrain consumer demand. Overall, this will make for continued difficult trading conditions in the second half of the year with relief from high oil prices and increased energy-related costs not expected”, said Mr. Tung.
Mr. Tung concluded, “Despite the disappointing trend in freight rates during the first half of the year, the Group has remained profitable. OOCL’s results in the first half, particularly its operating margin, remain at an acceptable level despite the high price of oil – reflecting our success in meeting and exceeding customer expectations while keeping a tight control on its cost base. But with the industry still to absorb further new capacity in the second half of the year, and given the uncertain economic outlook in the United States and Europe, together with the ongoing pressure from energy costs, we expect that trading conditions for the second half of this year will be difficult. Despite the poor short-term outlook, the Group remains in good financial health and is on a clear path of sustainable competitive growth.”
As at 30th June 2011, the Group had total liquid assets amounting US$2,507.6 million and a total indebtedness of US$2,629.2 million. Net debt as at 30th June 2011 was therefore US$121.6 million versus net cash of US$1,468.8 million as at the 2010 year-end.
Mr. Cambie noted that, “The change from a net-cash to a net-debt position in the first half of 2011 was mainly due to the decrease in liquid assets after payment of the 2010 dividends, and as a result of deposits made for newbuilding orders. The Group continues to have sufficient borrowing capacity and remains comfortably within its
target of keeping its net debt to equity ratio below 1:1.”
OOIL owns one of the world’s largest international integrated container transport businesses which trades under the name “OOCL”. With more than 270 offices in 60 countries, the Group is one of Hong Kong’s most international businesses. OOIL is listed on The Stock Exchange of Hong Kong Limited.
The profit after tax and non-controlling interests attributable to equity holders for the first six months of 2011 includes a revaluation US$5 million of Wall Street Plaza to reflect an independent assessed market value for that property of US$160 million as at 30 June 2011. There was no revaluation gain or loss for Wall Street Plaza in the
equivalent 2010 interim period.
Earnings per ordinary share for the first half of 2011 were US28.0 cents, whereas earnings per ordinary share for the first half of 2010 were US205.3 cents of which US44.8 cents per share were from comparable continuing operations.
The Board of Directors is pleased to announce an interim dividend for 2011 of US7.0 cents (HK54.6 cents) per ordinary share. The dividend will be paid on 7th October 2011 to those ordinary shareholders whose names appear on the register on 7th September 2011.
OOCL took delivery of just one new-build vessel, the OOCL Beijing, during the first half of 2011- being the first 8,888 TEU vessel from Hudong-Zhonghua Shipbuilding. A second unit of the same series, the OOCL Canada, was delivered in July.
Mr. Kenneth Cambie, the Group’s Chief Financial Officer, noted that “The delivery of remaining six 8,888 TEU vessels on order from Hudong-Zhonghua Shipbuilding will be completed by 2014. Currently all vessels in our fleet, including these new additions, are fully deployed in our services. During the first half of 2011, OOCL placed orders for ten 13,208 TEU vessels from Samsung Heavy Industries for delivery in 2013 and 2014. Though it is not yet a regulatory necessity, the design of these vessels has already taken into account impending IMO energy efficiency requirements.”
Wall Street Plaza continues to perform in line with expectations, and based on an independent valuation, it has been re-valued upwards by US$5 million as at 30 June 2011 to reflect an assessed market value of US$160 million.
In April this year, Beijing Oriental Plaza was successfully floated publicly via a Real Estate Investment Trust (“REIT”). The Group’s interest in Beijing Oriental Plaza is indirect, via investment in its ultimate parent, Hui Xian Holdings. The Group’s holding in Hui Xian Holdings has been revalued as at 30 June 2011 to US$173.6 million.
Mr. Tung commented on the outlook in the container shipping market, “The late introduction of peak season surcharges on the Trans-Pacific trade, despite reasonable levels of demand, is an indicator of the difficult trading conditions expected for the remainder of the year. Capacity deployment issues in the industry are likely to continue in the near term, and the traditional peak season lift in demand may give only limited improvement, at best, in average freight rates over the remainder of the year. There is uncertainty as to how strong consumer demand in the United States will be over the Thanksgiving & Christmas retail selling seasons this year following the recent termination of the US Government’s fiscal and monetary stimulus programs.”
“While the economies of northern European countries are performing well, the support needed for those members of the Euro-zone with excessive levels of sovereign debt may constrain consumer demand. Overall, this will make for continued difficult trading conditions in the second half of the year with relief from high oil prices and increased energy-related costs not expected”, said Mr. Tung.
Mr. Tung concluded, “Despite the disappointing trend in freight rates during the first half of the year, the Group has remained profitable. OOCL’s results in the first half, particularly its operating margin, remain at an acceptable level despite the high price of oil – reflecting our success in meeting and exceeding customer expectations while keeping a tight control on its cost base. But with the industry still to absorb further new capacity in the second half of the year, and given the uncertain economic outlook in the United States and Europe, together with the ongoing pressure from energy costs, we expect that trading conditions for the second half of this year will be difficult. Despite the poor short-term outlook, the Group remains in good financial health and is on a clear path of sustainable competitive growth.”
As at 30th June 2011, the Group had total liquid assets amounting US$2,507.6 million and a total indebtedness of US$2,629.2 million. Net debt as at 30th June 2011 was therefore US$121.6 million versus net cash of US$1,468.8 million as at the 2010 year-end.
Mr. Cambie noted that, “The change from a net-cash to a net-debt position in the first half of 2011 was mainly due to the decrease in liquid assets after payment of the 2010 dividends, and as a result of deposits made for newbuilding orders. The Group continues to have sufficient borrowing capacity and remains comfortably within its
target of keeping its net debt to equity ratio below 1:1.”
OOIL owns one of the world’s largest international integrated container transport businesses which trades under the name “OOCL”. With more than 270 offices in 60 countries, the Group is one of Hong Kong’s most international businesses. OOIL is listed on The Stock Exchange of Hong Kong Limited.