OOCL profit falls 86%

Orient Overseas (International) Limited and its subsidiaries (the “Group”) recently announced a profit after tax and non-controlling interest attributable to equity holders of US$175.0 million for the six month period ended June 30th, 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.

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 of June 30th, 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 also announced an interim dividend for 2011 of US7.0 cents per ordinary share. The dividend will be paid on October 7th, 2011 to those ordinary share holders whose names appear on the register on September 7th, 2011.

The Chairman of OOIL, Mr. C.C. Tung, said, “Following the record result for our container transportation and logistics business in 2010, trading conditions in the first half of the year have been difficult and the outlook for the full year is disappointing.

Demand levels remain reasonable as reflected in an overall year-on year increase in liftings, but, with the rate of new capacity introduction having outpaced demand growth, freight rates on many east-west trades have steadily deteriorated since last year.

This is particularly noticeable on the Asia-Europe trades. The deterioration in freight rates has occurred despite the need for improved revenues to offset the significant increases in the price of bunker and other energy related costs that have occurred this year.” <Korea Shipping Gazette>