OOIL said its financial outcome for the first half of 2019 is a “meaningful improvement” from the same period last year
Its Container Transport and Logistics business reported EBIT of US$153M, representing an operating margin of approximately 4.6%. Liner liftings grew by 3.2% to 3.4M TEU and revenue levels increased by 6.5%. OOIL said “Market growth did indeed slowdown in some trade lanes, but in many cases this slowdown in volume growth was outpaced by an improvement in freight rates.”
OOIL announced a profit attributable to equity holders of US$139.0M for the six-month period ended 30 June 2019, compared to a loss of US$10.3M for H1 2018.
It said “In the first half of 2019, despite an economic environment filled with uncertainties, and with seemingly slowing growth in terms of demand for container shipping services, OOIL’s financial outcome is a meaningful improvement from the same period last year, and represents a pattern of steady progress in results throughout the second half of 2018 that continued through the first half of 2019. The good results are attributed to the joint efforts of the management team and all staff of OOIL under the guiding principle of ’outperform the market, drive innovation, lead the times’.”
In H1 2019, no newbuilds were delivered, and no orders were placed by the Group. Currently, the six 21,413-TEU G-class vessels delivered in 2017-2018 are among the largest container ships in OOIL’s fleet.
Last July OOIL launched its ‘dual brand’ strategy for achieving synergy benefits and improving service quality. It said “It is pleasing to note that our efforts to generate significant synergy savings through co-operation within the COSCO group are bearing fruit.”
OOCL said it had also achieved significant synergy benefits through network planning, equipment pooling, procurement and IT. It added “During the period, we have continued to grow OOCL, beginning new services to Latin America, the Caribbean and Africa to provide more globalised service to customers… Meanwhile, our unit cost (excluding bunker cost) has been on a downward trend as the result of synergies gradually achieved in cost saving.
“At the time of writing, we edge closer to the conclusion of the sale of our container terminal in Long Beach, California. The transaction announced by us on 29 April 2019 not only generates meaningful cash proceeds now, but also ensures OOCL will continue to have access to a highly automated and efficient terminal that meets our needs.”