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OOCL hammered by global trade slump
2009/3/23
Orient Overseas Container Line will slash capacity by 20 percent this year after its parent company posted an 89 percent drop in 2008 profit.
Orient Overseas (International) Ltd (OOIL) profit plunged to US$272.3 million from $2.55 billion a year earlier, the company said in a statement to the Hong Kong exchange.
The company booked a $1.99 billion gain in 2007 after selling container terminals in Canada and the US.
Demand for computers and toys made in Asia has slumped after US and European consumers pared spending amid the worst economic crisis since the Great Depression.
"It''s a very difficult year so far," chief financial officer Ken Cambie told reporters. Freight rates have had a "large drop" in the first two months and are "not adequate to cover costs," he said.
OOCL will return up to 16 chartered vessels to shipowners, reducing fleet growth by 5.3 percent, Cambie said.
The carrier operated 89 vessels at the end of last year and has 10 new vessels due for delivery this year, with another 10 by 2011. Out of these, 14 are already fully funded, Cambie said. There won''t be a "material change" in delivery plans this year and next, he added.
Orient Overseas''s fuel costs rose 53 percent to $1.21 billion last year, as the average price surged 45 percent to $519 per tonne. Fuel costs this year will be around 50 percent lower than in 2008 if prices stay at current levels.
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2009/3/24