Orient Overseas (international) Limited · HKEX:316
Orient Overseas (international) — FY2015 Earnings Presentation
55 slides from Orient Overseas (international)'s earnings presentation, Mar 7, 2016
Slide 1: Orient Overseas (International) Ltd 2015 Full Year Results Presentation
Orient Overseas (International) Ltd 2015 Full Year Results Presentation March 7th 2016 1
Slide 2: 2015 Full Year Results Highlights
2015 Full Year Results Highlights Group Revenue US$ 6 bil 9% YoY Group Operating Profit US$ 353 mil 7% YoY Group Profit After Tax US$ 284 mil 5% YoY Liner Logistics EBIT 5.0% 1.2% Final Ordinary Dividend US 1.85 cents per share Total Full Year Ordinary Dividend US 11.45 cents per share 3/7/1
Slide 3: 2015 Review
2015 Review • A roller coaster year • H1 : Benefited from lower fuel cost and strong US demand • H2 : Market turbulences ‒ Oversupply ‒ AE demand weak ‒ US imminent interest rate normalization and slower retail sales • Poor market condition gave rise to further rate erosion, offsetting bunker cost s
Slide 4: Trade Volume – FY 2015
Trade Volume – FY 2015 Trade FY 2015 FY 2014 Transpacific EB 3.7% 5.8% Asia Europe WB -3.6% 7.4% Intra Asia (IADA) 2.5% 1.9% Trans Atlantic WB 4.3% 8.9% Sources: JoC, CTS, IADA 4 2-Mar-2016
Slide 5: Slow Demand Growth – Volume
Slow Demand Growth – Volume 3/7/16 5
Slide 6: 2015 Full Year Results
2015 Full Year Results 6
Slide 7: 2015 Group Highlights
2015 Group Highlights • Despite a turbulent year, OOCL achieved an EBIT Margin of 5% through: – Yield Management – Continuous cost efficiency gains • Measured NB capacity growth: – 4 x 8,888 TEU vessels delivery in 2015 – 6 x 20,000 TEU class NB delivery in 2017 • Balance Sheet Management: – Net Deb
Slide 8: Group Results Breakdown
Group Results Breakdown US$M 31-Dec-2015 31-Dec-2014 Var Container Transportation and Logistics 218.0 178.7 39.3 Property and Investments Wall Street Plaza 16.7 10.3 6.4 Hui Xian 25.6 43.5 (17.9) Interest, Investments and Others 23.6 37.9 (14.3) 65.9 91.7 (25.8) Total 283.9 270.4 13.5 3/7/16 8
Slide 9: EBIT Breakdown
EBIT Breakdown US$M 31-Dec-2015 31-Dec-2014 Container Transportation and Logistics - 294.0 249.4 EBIT Property and Investments - EBIT Wall Street Plaza 27.7 17.7 Hui Xian 25.6 43.5 Interest, Investments and Others 23.6 37.9 76.9 99.1 OOIL GROUP - EBIT 370.9 348.5 Finance Costs (63.6) (54.0) Taxation
Slide 10: Group Balance Sheet Highlights
Group Balance Sheet Highlights US$M 31-Dec-2015 31-Dec-2014 Non-current Assets 6,815 6,450 Current Assets 2,917 3,184 Total Assets 9,732 9,634 Non-current Liabilities 3,725 3,654 Current Liabilities 1,209 1,345 Total Liabilities 4,934 4,999 Shareholders’ Funds and Total Equity 4,798 4,635 3/7/16 10
Slide 11: Total Liquid Assets
Total Liquid Assets US$M 31-Dec-2015 31-Dec-2014 Cash and Bank Balances 2,016 2,166 Portfolio Investments, Equities and 532 469 Bonds Restricted Bank Balances 1 55 Total 2,549 2,690 3/7/16 11
Slide 12: Net Debt Position
Net Debt Position US$M 31-Dec-2015 31-Dec-2014 Liquid Assets 2,549 2,690 Debt 4,102 3,985 Net Debt 1,553 1,295 3/7/16 12
Slide 13: Debt-to-Equity Ratios
Debt-to-Equity Ratios Gross Debt to Equity Net Debt to Equity Ratio Ratio 1.0 1.0 0.86 0.85 0.79 0.63 0.64 0.5 0.48 0.5 0.32 0.28 0.25 0.12 0.06 Net cash 0 0 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 3/7/16 13
Slide 14: OOCL
OOCL 14
Slide 15: OOCL Performance
OOCL Performance 2015 2014 %▲ Liftings ('000 TEU) 5,576 5,586 -0.2% Revenue Per TEU (US$ / TEU) 936 1,040 -10.0% EBIT Margin 5.0% 3.8% 1.2% 3/7/16 15
Slide 16: OOCL Revenue and Lifting – 2015
OOCL Revenue and Lifting – 2015 Total US$5,219 mil Total 5,575,874 TEU 3/7/16 16
Slide 17: Global Revenue & Lifting Distribution
Global Revenue & Lifting Distribution Trans Pacific Market 2015 = 1,318,025 TEU 2014 = 1,288,509TEU Growth = 2.3% Total Asia Europe Market 2015 = 5,575,874 TEU Trans Atlantic Market (incl. Intra Europe) 2014 = 5,585,516 TEU 2015 = 365,773 TEU 2015 = 893,807 TEU Growth = -0.2% 2014 = 384,988 TEU 2014
Slide 18: 2015 - Total Operating Costs
2015 - Total Operating Costs 2015 2014 13% 14% 13% 13% 56% 52% 5% 6% 11% 17% Voyagecost Equipment Vessel Bunker Cargo cost cost costand :::Terminal :Charter Fuel Port repooil, charges, cost hire cost, Low:expense, Repo sulfur Transportation, Canal cost, fuel dues, Depreciation, oil, Depreciation, Al
Slide 19: Unit Operating Cost Saving 2015
Unit Operating Cost Saving 2015 2015 2015 / 2014 US$ / Per Lifting Proportion %▲ Total cost 100% -11% Cargo cost 56% -5% Equipment and repo costs 14% -3% Vessel Voyage cost 19% -4% Bunker cost 11% -41% 3/7/16 19
Slide 20: Bunker Costs – 2015
Bunker Costs – 2015 FY 2015 US$M YoY Total Bunker Consumption ('000 TON) Up 5% Loadable Capacity Up 6% Unit Bunker Consumption per TEU loadable capacity Down 1% 3/7/16 20
Slide 21: Net Operating Capacity Breakdown
Net Operating Capacity Breakdown No of Capacity Average % of Total As at 31 Dec 2015 Vessels (TEU) (TEU) Fleet Owned 55 415,157 7,548 74% Long Term Chartered 7 41,216 5,888 7% Short Term Chartered 45 157,884 3,509 28% Charter-Out (4) (52,832) (13,208) (9%) Total 103 561,425 100% 21
Slide 22: Property Investments
Property Investments 22
Slide 23: Property Investment
Property Investment Wall Street Plaza – Fair value gain of US$19.5 million for 2015 – Valuation of US$200 million as at 31 Dec 2015 – Performance is in line with expectations – Vacancy rate of 5.9% as at end of 31 Dec 2015 Beijing Oriental Plaza – Directly and indirectly holding approx. 4.4% of Hui
Slide 24: Beijing Oriental Plaza – 31 Dec 2015
Beijing Oriental Plaza – 31 Dec 2015 OOIL 31-Dec-2014 : 50% 31-Dec-2014 : 50% Dividend Dividend in Specie 12.5% 31-Dec-2015 : 37.5% 31-Dec-2015 : 62.5% Hui Xian Holdings 4.4% Hui Xian REIT Properties 24
Slide 25: 2016
2016 25
Slide 26: 2016 Outlook
2016 Outlook • Great uncertainty exists in 1Q • Demand growth had been poor across most trades except TP, however the CNY effect will distort the numbers • Container Demand growth forecast for 2016 is 3.7% • Rates are still volatile • Bunker seems likely to remain relatively low 3/7/16 26
Slide 27: Trade Volume - Jan 2016
Trade Volume - Jan 2016 Trade Jan 2016 FY 2015 FY 2014 Transpacific EB 21.4% 3.7% 5.8% Asia Europe WB -1.8% -3.6% 7.4% Intra Asia (IADA) 3.7% 2.5% 1.9% Trans Atlantic 5.8% 4.3% 8.9% WB Sources: JoC, CTS, IADA 27 2-Mar-2016
Slide 28: Global Demand and Supply Forecasts
Global Demand and Supply Forecasts Net capacity growth 28 Updated Feb 2016
Slide 29: New Building Deliveries - Static Slots
New Building Deliveries - Static Slots Source: Alphaliner 5.2% * 29
Slide 30: Cellular Fleet Growth vs Global Throughput
Cellular Fleet Growth vs Global Throughput Ml Fleet Capacity Ml Forecast 2016 ome % Annual Capacity Growth =o % Global Throughput Growth x 2 g x < a ne ES = a8 a 4 a oe O Ss “ Oo fs, 5 Q 2 20 , x Fr a x a ” 10 ALPHALINER 0 N) fo 9S & om a a s s s os aS s oe a” aa ae a a” a * * > > > > > S > > o > >
Slide 31: Carriers’ Average Vessel Size
Carriers’ Average Vessel Size Source: Alphaliner, Jan 2016 31
Slide 32: Management Focus
Management Focus 32
Slide 33: OOIL Strategy
OOIL Strategy • Continue to: − Focus on yield − Manage costs • Alliance • Invest in our industry leading IT system • Achieve scale with right vessels in right trades • LBCT Terminal will start operation in 2016 • Continue to grow our logistics business • Maintain Robust Capital Structure - Will rema
Slide 34: Disclaimer
Disclaimer The information provided is for reference only and includes data obtained from sources provided by the relevant information provider(s) and is subject to change without notice. Orient Overseas (International) Limited (“OOIL”) and its affiliates, and the concerned information provider(s),
Slide 35: Supply
Supply 35
Slide 36: Number of ships
Summary of New Buildings ?Q =undefined quarter New building deliveries 70 Delivered Planned 60 11 7 13 11 Number of ships 50 11 6 18 18 9 40 10 16 29 8 13 11 11 12 20 10 30 17 10 12 12 4 12 14 8 13 14 18 19 7 6 20 8 2 37 1 32 30 30 30 3 27 24 24 11 10 21 22 22 18 20 20 19 6 14 17 16 13 2 8 2 3 2 2 3
Slide 37: 2015 Static Supply Review
2015 Static Supply Review • 2015 year-end global fleet = 19.9 MM teu • 2015 static supply growth = 8.5% • 2015 Deliveries = 1.7 MM teu or 214 vessels • 2015 Scraping = 0.35 MM teu • 2015 Idle vessels = 6.8% Source: Alphaliner 2-2-2016 37
Slide 38: Transpacific Headhaul Demand
Transpacific Headhaul Demand Source: JoC Updated 15-Feb-2016 38
Slide 39: Transpacific Headhaul Demand
Transpacific Headhaul Demand Source: JoC Updated 15-Feb-2016 39
Slide 40: Asia-Europe Headhaul Demand
Asia-Europe Headhaul Demand Source: CTS 3-Mar-2016 40
Slide 41: Asia-Europe Headhaul Demand
Asia-Europe Headhaul Demand Source: CTS 3-Mar-2016 41
Slide 42: Long Beach Container Terminal
Long Beach Container Terminal A significant investment for the future 8-6-2015 42
Slide 43: LBCT
TraPac SSAT Matson (MOL) (MTN) 2016: 0.5 x 13,000 Pier A 2016: Nil 2020: 1 X 13,000 (MSC) 2020: Nil Automation 2016: Nil 2020: 1 x 13,000 WBCT (YMN) LBCT 2016: 0.5 x 13,000 2016: 1 X 13,000 2020: 1 X 13,000 YTI TTI 2020: 3 x 13,000 (NYK) (HJN) WBCT 2016: Nil (CSCL) 2016: 2 x 13,000 2020: 1 x 13,000
Slide 44: LBCT+CUT+Sea=MHRP
LBCT+CUT+Sea=MHRP MHRP LBCT CUT 44
Slide 45: Long Beach Container Terminal
Long Beach Container Terminal 4Q 2015 New terminal phase one completion 1H 2016 New terminal phase one testing 2H 2016 Go live – Parallel calls 2018 Phase out of old terminals 2020 Full completion 45
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Slide 47: OOCL Logistics Globally
Europe: * 12 offices / sales offi ¢ 16 warehouse lo ffices / sales offices ‘ehouses, 21 locations USA and Canada’ outheast Asia * 9 offices / sales offic ¢ 14 warehouse locatio € 88 _ a locations South America (Brazil * 11 agent offices 2014 Geographical Expansion in: Central America, Italy “ :
Slide 48: OOCL Logistics
OOCL Logistics Business segments : • ISCMS • Freight Forwarding • Domestic Transportation 48
Slide 49: IT
IT IT 49
Slide 50: IT Investment & Development
IT Investment & Development Operational Efficiency Data Transparency – Shipment transparency IRIS 1 1997 – Realtime Update – Cross Functional / Cross Regional Sharing Data mining and analytics Mining and 2002 IRIS-2 Analytics – Vessel tracking application – Better yield management – Superior transsh
Slide 51: Examples of Cost Saving and Efficiency gain from IT
Examples of Cost Saving and Efficiency gain from IT Business Processes: – Simplification – invoice approval process, vendor management, – Standardization – Biz process standardization/ISO standard – Automation - Auto billing of detention / demurrage, real time correction memo Yield Management – Iden
Slide 52: BUNKER
BUNKER 52
Slide 53: Bunker Price – Quarterly and Monthly Avg
Bunker Price – Quarterly and Monthly Avg As of 29-Feb-2016 53
Slide 54: Bunker Price – Past Week
Bunker Price – Past Week As of 29-Feb-2016 54
Slide 55: Disclaimer
Disclaimer The information provided is for reference only and includes data obtained from sources provided by the relevant information provider(s) and is subject to change without notice. Orient Overseas (International) Limited (“OOIL”) and its affiliates, and the concerned information provider(s),
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