World News
Orient Overseas Profits Drop 84% in 2013
Orient Overseas (International) Ltd. (OOIL) reports its profits plunged 84 percent to $47 million in 2013, while revenue declined to $6.2 billion from $6.5 billion in 2012.
"Seaborne trade growth for the liner industry was subdued in 2013," said Chairman C C Tung.
"Freight levels were disappointing, especially during the first half of the year."
Tung said the market improved slightly in the second half of the year, but the delivery of newbuildings with a tonnage of almost 1.4 million twenty-foot equivalent units (TEU) over the year pushed global capacity supply up 5.7 percent, while demand grew only by 4.2 percent.
"The deployment of the largest newbuildings to the Asia-Europe trade triggered cascading into the Trans-Pacific trade, which in turn further displaced a considerable number of mid-sized ships to other trade lanes," he said.
"This cascading effect brought considerable excess capacity to the Intra-Asia and Australasia trades as well as the Trans-Pacific trade, and added volatility to the market."
OOIL itself took delivery of eight 13,208 TEU "Mega" class newbuild vessels, and two 8,888 TEU "SX" class ships, increasing its net operating capacity 9.7 percent.
Tung said the high efficiency of the new ships should help the company's profit margins in the coming year.
"In 2014, the Group shall see the full year effect of the Mega class newbuildings delivered in 2013, all of which were developed with the most advanced design and equipped with the latest technology," he said.
"A positive contribution of unit cost reduction and, given more favourable market conditions, an improvement in margin are therefore expected in the coming year."
Last month, North Rose Fulbright released survey results showing that, while shipping industry participants are worried about oversupply, they are also eager to buy additional assets, suggesting a "disconnect," according to Global Head of Transport Harry Theochari.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 655.50 | 2.00 | 808.50 | 4.50 |
| Rotterdam | 619.00 | 0.00 | 789.00 | 8.00 |
| Houston | 628.50 | 7.50 | 812.50 | 1.50 |
| Fujairah | 653.50 | 4.50 | 900.00 | 2.50 |
| Global 20 Ports Average | 672.00 | 0.50 | 885.00 | 7.00 |
| Global 4 Ports Average | 639.00 | 2.50 | 827.50 | 2.00 |
| Global Average Bunker Price | 727.50 | 1.50 | 933.50 | 5.00 |
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