HONG KONG: Oriental Overseas International saw interim profit rise 31.63 percent to US$238.63 million (HK$1.86 billion) from a year earlier, despite a drop in revenue due to persistent overcapacity in the industry.
Earnings per share were 38.1 US cents. An interim dividend of 9.6 US cents was declared.
The container transport and logistics giant, controlled by the family of former Hong Kong chief executive Tung Chee- hwa, saw revenues drop 5.96 percent to US$3.044 billion from the first six months of last year.
However, a cut in operating costs of 10.52 percent, mainly due to tumbling oil prices, pushed profits up.
Chief financial officer Alan Tung Lieh-sing said freight rates have already bottomed out and would hopefully rise during the historical peak season in the second half, pushing up demand.
But Tung said the sustaining supply overhang is likely to exert pressure on freight rates, and demand and supply balance would only improve from next year.
Supply and demand imbalance also prompted liner lifting to drop 2 percent in the period from a year back, while load factor eased 4 percent. Average revenue levels in some trade lanes reached new post-global financial crisis lows, with revenue per TEU averaging at a 4 percent drop in the first half.
Asia-Europe lifting slid 6 percent as revenue per TEU slumped 17 percent, due to unfavorable supply and demand balance caused by launch of new tonnage and slow import growth in Europe.
Improvement was seen in trans- Pacific liftings and rates, and freight trade lanes in Europe, Tung said.
The firm said the industry enjoyed a relatively stable freight market in the first quarter. But fresh capacity pushed freight rates lower in the second quarter.
