Wednesday, March 6, 2013

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OOCL full-year profit surges 63 percent on higher freight rates

Orient Overseas, the parent company of Orient Overseas Container Line, announced a 63 percent increase in full-year profit on rising freight rates.

Net income increased to $296.4 million from $181.6 million year over year, OOCL said in a statement today. That tops the $275.7 million income average predicted by 20 analysts compiled by Bloomberg. Sales jumped 7.4 percent to $6.46 billion.

“Orient Overseas benefited from its bigger exposure to the more stabilized transpacific market,” said Lawrence Li, an analyst at UOB-Kay Hian Holdings. “It can also charge clients more by providing premium door-to-door services.”

Container shipping companies, including Maersk Line, the world’s largest, have begun raising rates to offset 2011 losses from vessel overcapacity. OOCL’s average freight rate increased by 2.9 percent in 2012 after dropping 6.7 percent in 2011.

OOCL handled 5.22 million TEUs in 2012, a 3.7 percent hike year over year. That included 1.25 million TEUs in the transpacific market and 885,323 TEUs on the Asia-Europe route.

For more of the Bloomberg Businessweek story: businessweek.com

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