The shipping industry will see improved prospects next year after persistent pricing pressures in 2015, according to Orient Overseas (International) Ltd. (OOIL, 00316.HK), one of the world’s major container transport and logistics services providers.
New capacity in the market rose 10 percent this year, while shipping demand grew only 4.7 percent, putting pressure on freight rates, said Tung Lieh-sing, acting chief financial officer of OOIL.
It is expected that 1.3 million twenty-foot equivalent units (TEU) of capacity will be delivered this year, sending the total capacity in the industry up by 6 percent, the Hong Kong Economic Journal quoted Tung as saying.
OOIL’s fleet, meanwhile, is expected to expand at a compound annual growth rate of 10.9 percent from 2015 to 2017.
The company’s revenue slid 5.96 percent to US$3.04 billion for the first six months of this year, but net profit grew nearly 32 percent to US$238.6 million.
A nine percent decline in unit operating costs helped boost the shipping firm’s margin of earnings before interest and tax by 2.8 percentage points to 7.3 percent.
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