Orient Overseas 2013 interim results

Orient Overseas (International) Limited and its subsidiaries recently announced a loss attributable to equity holders, after tax and non-controlling interest, of US $15.3 million for the six-month period ended June 30th, 2013 compared with a profit of US $116.5 million for the same period in 2012.

The loss after tax and non-controlling interests attributable to equity holders for the first six months of 2013 included investment income of US $9.1 million from Hui Xian and a net fair value loss of US $4.6 million on Wall Street Plaza revaluation after capital expenditure net off.

Loss per ordinary share for the first half of 2013 was US 2.4 cents, whereas earnings per ordinary share for the first half of 2012 were US 18.6 cents.

The Board of Directors has resolved not to pay an interim dividend for 2013. This decision for the interim reflects the lack of profitability for the first half of the year and is consistent with the group`s efforts in preserving capital and minimizing cash out flows during unprofitable periods.

The Chairman of OOIL, Mr. C C Tung, said, "The global economy continued to be uncertain during the first half of 2013, and the container transportation industry faced the challenges of weak cargo growth, capacity oversupply and high bunker costs."

"Market growth across major trades grew only by approximately 2.2% during the first half of 2013. While the markets expect a more robust second half on the demand side, the industry is still expecting a full year newbuilding supply increase of 10% in TEU terms or 270 new ships in 2013.

These factors culminated in a disappointing first half for the group." "The operating environment in the first half of 2013 was characterized by the deterioration of freight rates from the last quarter of 2012, especially on the Asia-Europe trade, and the extremely competitive freight rates recorded in both the Trans-Pacific trade and the Intra-Asia trade. A series of rate increases during the second quarter in the market on the East West trades generally could not be sustained." added Mr. Tung.

OOCL`s total liftings for the first half of 2013 were down 1.5% compared to the corresponding period last year. Average freight revenue per TEU for the period was US $1,088, a decrease of 2.2% over the 2012 first-half average of US $1,112 per TEU. The slow growth in volume and the competitive freight rate environment resulted in reduced contribution for the group. < Korea Shipping Gazette >