OOIL incurs first half operating loss of US$196.6m

The company says its financial woes stem from the economic recession in the US and other OECD countries and more specifically to the decline in freight rates and volumes that began at the end of 2008 and have affected all trades. Overall, cargo liftings decreased by 17.2% and overall revenue per teu declined by 25.1% compared to first half 2008.

“Market conditions in the first six months of 2009 have been extraordinarily difficult for the core business of container transportation and logistics, resulting in a trading loss for the group for the half year,” said OOIL Chairman C.C. Tung. With industry capacity continuing to increase, and continued weakness in the US and European economies, I expect trading conditions for the remainder of the year to remain difficult. While there are signs that the worst of the downturn may be behind us, a rebound in the global economy is expected to be subdued.”

Despite the gloom, Tung sees glimmers of hope. “While the result for the first half of the year has been disappointing and the outlook for the remainder of the year and into 2010 remains challenging, the eventual pick-up in demand as the global economy recovers will improve industry dynamics. Positive sentiment should see freight rates rise, and global trade volume growth will redress the current supply/demand imbalance. I am therefore confident that the global container shipping industry will return to health as the global economy begins to recover in earnest,” he said.