Orient Overseas (International) Limited (OOIL) has seen the phenomenal profits of recent years come crashing down to earth.
The Hong Kong-listed company logged a profit of $1.36bn in 2023, down 86% from $9.96bn in the previous year.
The result was due to the decline in freight rates in the second half of last year.
That dragged down earnings of its Hong Kong-based container shipping brand Orient Overseas Container Line (OOCL).
“The exceptionally robust container shipping market that we witnessed during the pandemic is now far behind us,” OOIL said.
“We have returned to a rather normal yet uncertain year 2023,” it added.
The company expects the container shipping market to be impacted as carriers continue to navigate through the Cape of Good Hope in the coming months.
Yet it warned that the Red Sea situation is different to the spike in demand, inadequate supply, and interruption of the supply chain during the pandemic era.
“It is difficult to predict what the changeable trend would be,” the company noted.
“What is obvious is that the container shipping market is highly susceptible to any form of major disruption, and the complete effect will not be seen until the original balance is restored or a new equilibrium is found.”
OOIL saw revenues drop to $8.3bn in 2023, down from $19.9bn in the previous year.
Liftings were relatively stable at 7.3m teu.
Uncertain future
Looking ahead, the shipping market remains uncertain.
Changing alliance structures, geopolitical tensions and new environmental regulations will have a long-lasting impact on the future development of the shipping market, it added.
“The global economy seems to be recovering, but the pace may be slow and with uncertainties,” OOIL noted.
OOIL, which together with sister company Cosco Shipping Lines is owned by Cosco Shipping Holdings, recently took delivery of the 24,000-teu OOCL Abu Dhabi (built 2024).
The vessel is the eighth in a series of 12 conventionally powered and scrubber-fitted very large container ships to be delivered to OOCL from the Dalian Cosco Ship Engineering (DACKS) and its Nantong-based sister yard NACKS.
The OOCL Abu Dhabi will phase into the OCEAN Alliance Asia-Europe service.
