AXS-Alphaliner Newsl..

ALPHALINER Weekly Newsletter 2009-Week 16
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OOCL revenue tumbles 31% in first quarter
Hong Kong based OOCL has released its first quarter operational update
with total revenues dropping by 31.2% to $954M from $1.4M a year ago.
Liftings were 15.6% down from the same period last year.
The overall load factor dropped by 11% compared with last year despite a
1.2% decrease in capacity. Overall average revenue per teu decreased by
18.5% compared with the same period last year.
OOCL Operating Highlights 1Q 2009 breakdown by trade
Liftings (teu) Revenue ($'000) $/teu
Trade 1Q2009 1Q2008 Change 1Q2009 1Q2008 Change 1Q2009 1Q2008 Change
Trans-Pacific 279,377 329,496 -15.2% 409,980 496,598 -17.4% 1467 1507.144 -2.6%
Asia/Europe 164,300 191,904 -14.4% 149,819 343,521 -56.4% 9121.8624 1790.067 -49.1%
Trans-Atlantic 85,378 99,713 -14.4% 131,153 168,955 -22.4% 1536.145 1694.413 -9.3%
Intra-Asia/Australasia 449,107 538,036 -16.5% 263,215 378,232 -30.4% 586.0853 702.9864 -16.6%
TOTAL 978,162 1,159,149 -15.6% 954,167 1,387,306 -31.2% 975.4693 1196.831 -18.5%
All trades suffered
reductions in both
volume and rates
The carrier saw the largest revenue slide on the Asia-Europe trades, with
revenue more than halved from $344M to $150M. Liftings fell by 14% but
more significantly, rates on the trade dropped by 49% which contributed to
the drastic slide in profitability.
Surprisingly, the intra-Asia and Australasian trades also took a severe
hammering, with revenue falling by 30% to $263M. Both volumes and rates
in the trade dropped by about 16.5%. This trade represents OOCL’s largest
tradelane, accounting for 46% of its total liftings.
All tradelanes suffered a drop in both rates and volumes. While the Trans-
Pacific trade saw the lowest drop in revenue per teu, the impact of the
rate slump will likely be felt from May onwards when the new Trans-Pacific
contracts are in place.
The carrier said it plans to slash capacity and admits that the outlook
remains “poor” with rates falling below profitable levels. The first-quarter
operating results were released a month after the parent company Orient
Overseas (International) Ltd (OOIL) announced a drop in underlying net
profit for 2008 which halved to $272.3M as a result of higher costs and a
challenging environment for OOCL.
Responding to the crash in volumes, the company plans to cut capacity by
20% in 2009 by redelivering chartered-in tonnage and suspending services.
OOCL currently has 14% of its capacity idled.
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