OOCL parent company Orient Overseas (International) Ltd (OOIL) has seen its profit and revenue increase for 2019 on the back of synergy benefits
OOIL’s revenue jumped by 4.7% to US$6.87Bn in 2019 versus 2018, while it achieved a profit attributable to equity holders for 2019 of US$1.35Bn, compared to a profit of US$108.2M in 2018.
Container liftings rose by 3.8% to 6.9M TEU and container transport and logistics EBIT rose by 4.9% to US$370M, with a 5.3% margin.
A statement explained that OOCL has enjoyed “significant synergy benefits” in 2019 from its acquisition by COSCO Shipping. “Our original synergy targets established during the acquisition process have already been exceeded and our teams continue to work hard to identify and exploit further areas where synergy benefits may be obtained. These highly tangible benefits, achieved through effective network planning, equipment management, joint procurement and co-operation in IT, will be a key success factor for our group in 2020 and beyond,” said the statement.
OOCL said it would continue its steady growth of liftings and revenue and as part of this has decided to implement the ship renewal plan made five years ago, by ordering five new vessels. These are the first vessels to be ordered by the OOIL Group since 2015.
OOCL also concluded the sale of its terminal in Long Beach, California and will continue to have access to the terminal to service the requirements of its trans-pacific trade.
It highlighted the challenge of the coronavirus: “…In March, the outlook has become more pessimistic as the virus spread around the world. If the epidemic is further escalated globally and lasts for a long time, the medium and long-term impact will be more extensive and significant, and the growth of the global economy and container shipping demand will decline.
"The impact of the epidemic in 2020 may be longer and market uncertainty is further increasing. We expect the governments of many countries and regions may launch further stimulus packages to alleviate the downward pressure on the global economy.”
But it adds “We firmly believe China’s economy will continue to maintain stable growth in the medium and long term, and will continue to be an important stabiliser for global economic growth, thereby supporting global trade demand and the development of the shipping industry.”
OOCL has introduced special working procedures to protect staff and has been in regular communication with customers and vendors.
It also highlights the first-phase trade agreement between China and the US being signed has removed some of the uncertainty in the escalation of trade frictions, and the “narrowing of the gap between demand and supply in the container shipping market has led to reasonably positive expectations for the industry at the start of 2020”.