Orient Overseas International Ltd (OOIL) has reported its best six-month results in the company's history and maintained a bullish outlook for the coming months.
The Hong Kong-listed parent of Orient Overseas Container Line recorded a first-half profit of $2.81bn, up from just $102m for the same period of 2020.
Revenue jumped to $6.99bn from $3.42bn on higher freight rates and transport volumes.
“The first half of 2021 produced the best six-monthly results in the group's history,” the China Cosco Shipping-controlled company said in an interim report.
OOIL attributed the strong performance to healthy transpacific shipment demand, a recovering global economy and a series of supply disruptions across the globe.
“During the period we have seen port congestion, bad weather delays, labour disputes, shortages of truckers, the Suez Canal incident … and a range of other difficulties,” OOIL said.
“The global container shipping system is one large, interconnected network: any material disruption rarely has only a localised effect, but rather has a ripple effect around the world.
“We have worked hard to inject additional capacity into key routes on our network in order to provide further space for our customers, and we continue to do so.”
OOIL expects the container shipping market to remain strong until early next year, with forecasts for high US imports and limited newbuilding deliveries.
“US data shows US GDP already back to above pandemic levels, and very importantly it still shows retail-sector inventory-to-sales ratios at historic lows,” the report said. “There is an ongoing need for a high level of imports to satisfy local demand.
“The network continues to see multiple operational disruptions, reducing the ability of container shipping companies to satisfy the strong levels of customer demand.”
While container lines have rushed to place newbuilding orders in recent months, OOIL pointed out yard deliveries will stay limited by 2023 as vessel construction takes time.
“We monitor the market continually for early signs of any change in circumstances, but for the time being, it would appear that the outlook for the remainder of 2021 and the early part of 2022 seems promising,” the company said.
“Beyond that, in this time of Covid-19 and of the early stages of economy recovery, it is simply impossible to predict.”
The company, a subsidiary of state giant China Cosco Shipping container arm China Cosco Holdings, declared an interim dividend of $1.76 and a special dividend of $2.65 per share. Cosco Holdings also owns Cosco Shipping Lines, anther major box carrier.