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OOIL books US$1.35 billion profit on US terminal sale

Synergies from the acquisition by COSCO of Orient Overseas Container Lines (OOCL) and the sale of its Long Beach terminal were behind the Hong Kong company’s strong 2019 performance.

OOCL parent, Orient Overseas International Limited, said on 23 March 2020 that it achieved a US$1.35 billion profit for 2019. Revenue was up around 5% from 2018, to US$6.89 billion, while operating profit went up b 37% to US$361.28 million.

OOIL said, “Highly tangible benefits, achieved through effective network planning, equipment management, joint procurement and co-operation in IT, will be a key success factor for our group in 2020 and beyond.”

A one-off US$1.19 billion gain resulting from the sale of OOIL’s terminal in Long Beach in the US, as part of its acquisition by the Chinese state-owned group COSCO Shipping Holdings, resulted in the overall profit spike.

The Long Beach terminal was sold for US$1.78 billion to a Macquarie Infrastructure Partners-led consortium in October 2019. US regulators required the terminal sale in order to clear COSCO’s takeover of OOIL.

As part of the transaction, OOCL signed a 20-year container stevedoring and terminal services contract with the consortium.

On 10th March, the Group entered into contracts to construct five units of 23,000 TEU container vessels at a consideration of US$778.4 million which are expected to deliver in year 2023.

Like many in the shipping industry, OOIL acknowledged the uncertainties caused by the COVID-19 outbreak.

OOIL said, “A series of precautionary and control measures have been and continued to be implemented across the world and have affected the business and economic activities to some extent.”

Martina Li
Asia Correspondent

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