Joseph Bonney, Senior Editor | Aug 02, 2012 10:25AM EDT
Orient Overseas Container Line’s parent company reported a 26 percent drop in operating profit during the year’s first half and warned that prospects for a strong peak season “have dimmed a little of late.”
Hong Kong-based Orient Overseas (International) Ltd. reported a 7 percent increase in revenue to US$3.1 billion. Operating profit fell to $140 million from $188 million.
“The first half of 2012 has been challenging with very low market freight rates at the start of the year, low demand growth on the east-west trades, and a spike up in bunker fuel prices in early January,” OOIL Chairman C.C. Tung said.
“Fortunately, there has been a marked improvement in freight rates, particularly on the Asia-Europe services, to offset the low growth in demand on the east-west trades. Despite this recovery in rates, trading conditions have been, and are likely to remain, difficult and volatile given prevailing economic conditions and the continuing surplus of capacity on the major trades,” he said.
Tung warned that prospects for the third quarter peak season “have dimmed a little of late as a result of the poor economic data from the major consumer markets.”
He noted that carriers are scheduled to take delivery of additional large ships in the third quarter, and “deployed capacity will need to adjust quickly to meet demand levels if freight rates are to be maintained in the seasonally weak fourth quarter.”
OOCL’s volume rose 6.1 percent to 2.6 million TEUs in the year’s first half. Average revenue per TEU slipped 1 percent.
Contact Joseph Bonney at jbonney@joc.com. Follow him on Twitter at @JosephBonney.
