On 23 March, OOIL (Stock Code: 00316.HK) announced 2019 annual results. The net profit attributable to shareholders was US$1.3 billion, and if excluding the one-off gain from the sale of its interests in the Long Beach Container Terminal, the recurring net profit for the year reached US$195 million, up by 80% as compared with the US$108 million in 2018.
In 2019, global economic growth continued to be relatively low, and escalating trade frictions gave rise to uncertainty throughout the year. In this context, OOCL strengthened coordination with COSCO SHIPPING Lines and achieved significant synergies with the implementation of dual-brand strategy. The total synergies realized in 2019 exceeded the target set at the beginning of the year. These highly tangible synergy benefits, achieved through effective network planning, equipment management, joint procurement and co-operation in IT, became one of the key factors for the company to achieve outstanding performance.
In 2019, OOCL maintained steady growth of business volume and fleet capacity, with total cargo volume growing by 3.8% and total revenue growing by 4.7%. As at the end of 2019, OOCL operated a fleet of 104 vessels or 733,580 TEUs, representing a growth of 4.6% as compared with the total capacity at the end of 2018. OOCL will continue this steady growth, and it is in this context that the company has decided to implement the ship renewal plan that was made five years ago and ordered five new building vessels. These are the first vessels to be ordered by the OOIL group since 2015. Not only will these modern, efficient vessels improve its cost structure, fill the capacity gap caused by the reduced chartered capacity after expiry in the future and further improve the company’s environmental protection and green operation level, and they also serve as clear evidence of the entire group’s continuing commitment to the very successful dual brand strategy.
OOCL has long enjoyed a reputation for being at the forefront of digital technology advances in the sector. OOIL continues to build on this strength, promoting digital development in the information era. In July 2019, CargoSmart, a subsidiary of OOIL, announced the execution of the Global Shipping Business Network (“GSBN”) service agreements with some industry leading liners and port operators. GSBN aims to promote the establishment and information sharing of digital standards, and thereby to improve the operational efficiency of the industry, and the quality of its customer service.
2019 is the first complete accounting year after COSCO SHIPPING acquired OOIL. OOIL achieved outstanding performance in 2019, which is a proof of the success of the entry of OOIL into the wider China COSCO SHIPPING Group, combining the strengths of both sides in one momentous step forward. Facing the current challenging market situation, OOIL is well prepared to resist any potential headwinds, and will maintain its good track record to adapting quickly to changes in demand and in the operating environment, and continue to work pro-actively and diligently to be at the forefront of our industry, in technology, in environmental efficiency, in customer service, in social responsibility, and in profitability and financial health. OOIL will continue to create greater value for its shareholders and for all of its stakeholders.
The opinions expressed herein are the author's and not necessarily those of The Xinde Marine News.
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