Orient Overseas (International) Limited (OOIL) has witnessed a strong financial and operating performance for the first half the year, as market forces pushed freight rates upwards.
The first six months of 2022 produced the highest half-year revenue in the group’s history, with total revenue at $11 billion – a 63 per cent increase over last year’s figures ($6.9 billion).
Operating profit (EBIT) soared to $5.7 billion from $2.8 billion registered in the same period in 2021, while profit attributable to equity holders reached $5.6 billion for the six-month period ended 30 June.
The firm’s container line, Orient Overseas Container Line, reported liftings of 3.6 million TEU, which represented a small decrease by 7 per cent compared to the same period in 2021, while revenue per TEU increased by 74 per cent.
“The outstanding performance of the Group was driven by the continuing extraordinary conditions prevailing in the container shipping market,” reads OOIL’s report.
“[…] Levels of demand, which are better than expected but not phenomenally strong, continue to outpace the effective level of supply, which is under significant downward pressure from a combination of congestion, delays and disruptions.”
OOIL reported that supply chain hurdles pushing skyrocketing freight rates on most trade lanes drove its strong profitability during the period.
Although the company did not take delivery of new vessels in the first half of 2022, 12 23,000 TEU containerships are expected to be delivered starting from 2023, and another 10 16,000 TEU vessels will arrive from Q4 2024 to Q4 2025.
Looking forward, OOIL said it sees an unclear outlook owing to an array of conflicting signals as supply chain issues still burden the market.
Consumers’ demand is improving despite pre-pandemic levels have yet to be reached, but forecasts from various port and retail sources in the US suggest an ongoing resilience in the demand for imported goods.
“Anyone trying to forecast the future of container shipping must focus on what has created the current market, being the relationship between supply and demand as mentioned above, and not on any one individual factor,” continues OOIL’s statement.
“A proper understanding of the current market and its outlook must calmly consider each of the wide range of causes that have created current market conditions.”
OOIL’s revenue for 2021 reached $16.832 billion, more than double its income of $8.191 billion in 2020.This marked the company’s highest annual revenue yet.