Hong Kong-based container ship operator Orient Overseas (International) Ltd (OOIL) (0316.HK) on Friday posted a 65 percent fall in second half earnings as a deepening global downturn hit international trade.
The shipping and ports company posted a net profit of $114 million for the six months ended December, based on Reuters calculations, beating an average forecast of $110 million from 2 analysts polled by Reuters Estimates.
But the stock fell 4.4 percent to HK$17.38 after the company said it faced a challenging environment with increasing costs and weakening demand as global economic conditions deteriorated.
"We have now entered what I expect will be a protracted downturn for the container shipping industry," Chairman Tung Chee Chen said in a statement.
For the full year, OOIL earned $272.3 million, down 89 percent from $2.55 billion the previous year, which included a one-time profit of $1.99 billion from the sale of the terminal division.
Profit from continuing operations fell by more than half to $275.5 million in 2008. Its margin was hurt as operating costs inflated by 22 percent while revenue was up 16 percent.
Container transport and logistics accounted for 99 percent of the company's revenue and the rest was from property.
The company cut final dividend to 4.5 U.S. cents from 13.5 U.S. cents a year ago. It did not place any new orders for new buildings in 2008 and outstanding committed orders at the end of 2008 were for 10 P-class vessels and 10 SX-class vessels (8,000 TEU), which will be delivered over the next three years.
Tung told Reuters last month that OOIL would reduce its shipping capacity by up to a quarter in the first three months, to help sooth overcapacity amid weak demand.
The shipping and ports company posted a net profit of $114 million for the six months ended December, based on Reuters calculations, beating an average forecast of $110 million from 2 analysts polled by Reuters Estimates.
But the stock fell 4.4 percent to HK$17.38 after the company said it faced a challenging environment with increasing costs and weakening demand as global economic conditions deteriorated.
"We have now entered what I expect will be a protracted downturn for the container shipping industry," Chairman Tung Chee Chen said in a statement.
For the full year, OOIL earned $272.3 million, down 89 percent from $2.55 billion the previous year, which included a one-time profit of $1.99 billion from the sale of the terminal division.
Profit from continuing operations fell by more than half to $275.5 million in 2008. Its margin was hurt as operating costs inflated by 22 percent while revenue was up 16 percent.
Container transport and logistics accounted for 99 percent of the company's revenue and the rest was from property.
The company cut final dividend to 4.5 U.S. cents from 13.5 U.S. cents a year ago. It did not place any new orders for new buildings in 2008 and outstanding committed orders at the end of 2008 were for 10 P-class vessels and 10 SX-class vessels (8,000 TEU), which will be delivered over the next three years.
Tung told Reuters last month that OOIL would reduce its shipping capacity by up to a quarter in the first three months, to help sooth overcapacity amid weak demand.