Orient Overseas (International) Limited and its subsidiaries have reported a loss attributable to equity holders, of $56.7m for the six-month period ended 30 June 2016. This loss, which is made more significant when compared with profit of $238.6m for the same period in 2015, included investment income of $25.2m from Hui Xian and a net fair value gain of $9.7m.
Loss per ordinary share for the first half of 2016 was $0.09, whereas earnings per ordinary share for the first half of 2015 were $0.38. The Directors have not recommended the payment of an interim dividend.
The group has reported a 15.9% decrease in H1 2016 revenue to $2,561m, when compared with the same period in 2015 ($3,044m). The Chairman of OOIL, Tung Chee Chen, explained, “Market conditions in the first six months of 2016 have been difficult for the industry. Weak economic growth in many key economies has constrained consumer demand, and global uncertainty seems to have given rise to some level of slowdown in corporate and government investment. Consumer demand and investment are the key drivers of demand in our industry, and in this context it is no great surprise that cargo volume growth has been uninspiring.”
Tung continued to explain that the UK referendum, violence in Europe and geopolitical conditions in the Middle East and South China sea have injected another layer of cautiousness to sustained corporate activities and investment. However, he continued to state, “Although fuel costs have risen considerably since the remarkable lows of the first few months of 2016, they remain far lower than in recent years, and provide some element of cushion against the unsustainably low freight rates that have been seen in some trades”.
In the first half of 2016, no new-build vessels were delivered, and no new orders were placed by the Group. However, six 20,000 TEU class new-build vessels contracted with Samsung Heavy Industries Co. Ltd. in South Korea, are expected to be completed by the end of 2017.
Tung concluded, “The first half of 2016 was disappointing for OOIL. We expect continued challenges given the global landscape.”
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