Orient Overseas (international) Limited · HKEX:316
Orient Overseas (international) — FY2017 Earnings Presentation
29 slides from Orient Overseas (international)'s earnings presentation, 2018
Slide 1: Orient Overseas (International) Limited 2017
Orient Overseas (International) Limited 2017
Slide 2: 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 3: OOIL highlights
OOIL highlights EBITDA US$691.1m Financial Operating cash flow US$550.5m* highlights Profit US$137.7m Investing Completed delivery of 21,413 TEU vessels On-going investment in IT – ‘best in class’ for the Phase 2 Long Beach Container Terminal open future Net Debt to Equity ratio of 0.43 Conservative
Slide 4: 2017 Financial performance
2017 Financial performance Financial results reflect higher contract and spot rates Summary Annual Results 2017 (US$ million) Revenue 6,108 EBITDA 691.1 EBITDA margin 11.3% Profit 137.7 Profit margin 2.3% Earnings per share US 22.0 cps Much improved performance from core liner business Consistent pr
Slide 5: Group result breakdown
Group result breakdown US$M 31-Dec-2017 31-Dec-2016 Container Transportation and Logistics – EBIT 105.4 (184.6) EBIT margin 1.7% (3.5%) Property and Investments - EBIT Wall Street Plaza 56.2 26.4 Hui Xian 32.3 5.6 Interest, Investments and Others 57.4 32.3 145.9 64.3 OOIL GROUP - EBIT 251.3 (120.3)
Slide 6: Improved market conditions
Improved market conditions Shanghai Container Freight Index Revenue per TEU (US$) US$ 1,200 1,040 1,350 1,000 936 861 773 800 600 1,150 400 200 950 0 2014 2015 2016 2017 750 Liftings (TEU’s) 6,500,000 550 6,000,000 350 5,500,000 5,000,000 SCFI 2014 Average 2015 Average 2014 2015 2016 2017 2016 Avera
Slide 7: Growing diversified revenue
Growing diversified revenue 7
Slide 8: Industry trade volume
Industry trade volume YTD YTD YTD Trade 2017 vs 2016 2016 vs 2015 2015 vs 2014 Trans Pacific EB 6.3% 4.5% 3.6% Asia Europe WB 4.1% 3.0% (4.1%) Intra Asia (IADA) 0.7% (7.7%) (4.0%) Trans Atlantic 7.3% (1.7%) 4.7% WB Sources: Datamyne, CTS, IADA 8
Slide 9: TransPacific east bound demand
TransPacific east bound demand Jan 2017 4.8% Jan 2016 21.7% Jan 2015 (13.8%) Feb 2017 (11.3%) Feb 2016 34.0% Feb 2015 (0.4%) Mar 2017 15.3% Mar 2016 (20.9%) Mar 2015 24.8% Apr 2017 9.5% Apr 2016 (3.0%) Apr 2015 3.7% May 2017 7.4% May 2016 4.0% May 2015 5.7% June 2017 3.9% June 2016 1.5% June 2015 8.
Slide 10: AsiaEurope west bound demand
AsiaEurope west bound demand Jan 2017 7.4% Jan 2016 (2.5%) Jan 2015 (2.9%) Feb 2017 (7.5%) Feb 2016 (13.2%) Feb 2015 33.7% Mar 2017 7.6% Mar 2016 24.8% Mar 2015 (22.0%) Apr 2017 2.7% Apr 2016 10.5% Apr 2015 (10.3%) May 2017 9.0% May 2016 (0.2%) May 2015 (4.0%) June 2017 7.6% June 2016 2.8% Jun 2015
Slide 11: Intra Asia demand
Intra Asia demand Jan 2017 (13.8%) Jan 2016 0.0% Jan 2015 0.9% Feb 2017 (9.4%) Feb 2016 (1.5%) Feb 2015 6.9% Mar 2017 (5.7%) Mar 2016 (2.1%) Mar 2015 (10.8%) Apr 2017 (6.9%) Apr 2016 (8.8%) Apr 2015 (6.5%) May 2017 (1.5%) May 2016 (11.8%) May 2015 (3.6%) June 2017 2.1% June 2016 (2.8%) June 2015 (8.
Slide 12: TransAtlantic west bound demand
TransAtlantic west bound demand Jan 2017 10.9% Jan 2016 1.9% Jan 2015 : 1.3% Feb 2017 5.2% Feb 2016 3.4% Feb 2015 : 16.2% Mar 2017 1.4% Mar 2016 2.6% Mar 2015 : 1.8% Apr 2017 14.7% Apr 2016 (4.3%) Apr 2015 : (2.3%) May 2017 (0.6%) May 2016 (5.3%) May 2015 : 13.4% June 2017 8.6% June 2016 (5.1%) June
Slide 13: Container transportation (excl. logistics)
Container transportation (excl. logistics) 2017 / 2016 2017 2016 %▲ Liftings ('000 TEU) 6,299 6,081 4% Revenue (US$M) 5,466 4,704 16% Revenue Per TEU (US$) 868 774 12% Net Operating Capacity (TEU) 698,401 574,318 22% Load Factor (%) 83.7 84.9 1.2% 13
Slide 14: Operating costs 2017
Operating costs 2017 2017 / 2016 2017 Per Lifting %▲ Proportion Total cost 4% 100% Cargo cost 1% 50% Equipment and Repo costs 0% 16% Vessel Voyage cost 0% 21% Bunker cost 45% 13% 14
Slide 15: Bunker price - Sing 380c St (M)
100 200 300 400 500 600 700 - Jan-14 US$/t Mar-14 May-14 Jul-14 Sep-14 2016 Average Sing 380c St (M) Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 2017 Average 2014 Average May-16 Jul-16 Sep-16 Nov-16 Jan-17 Bunker price - Sing 380c St (M) Mar-17 May-17 Jul-17 Sep-17 2018 Average 20
Slide 16: Improving market fundamentals
Improving market fundamentals Synchronised global growth Improved supply vs demand fundamentals Limited new build ordering GDP Growth (%) Global Container Trade Demand vs Supply (%) 3.7% 3.7% 9% 3.6% 8% 7% 6% 5% 4% 3.2% 3% 2% 1% 0% 2016 2017 2018F 2019F Demand Fleet Growth* Source: IMF Sources: Alph
Slide 17: Gross new building deliveries
Gross new building deliveries million TEU 9.2% < 7,499 TEU ships 1.8 1.73 7,500 -14,500NPX 6.9% 8.5% 1.6 1.56 > 13,300 TEU ships 1.47 1.4 5.6% 0.81 1.19 1.2 0.60 4.6% 0.85 3.5% 1.0 0.94 0.84 0.66 0.8 0.48 0.6 0.55 0.70 1.6% 0.60 0.41 0.39 0.4 0.36 0.34 0.24 0.2 0.08 0.32 0.30 0.22 0.12 0.12 0.17 0.1
Slide 18: Balance sheet
Balance sheet Balance sheet much stronger than peer average Balance sheet well placed for growth Competitive funding arrangements with diversified network of banks OOIL Net Debt to Equity Net Debt to Equity 0.42 0.43 0.32 0.28 0.25 0.12 0.06 2010 2011 2012 2013 2014 2015 2016 2017 18 * Latest 3Q17 f
Slide 19: Operating cash flow
Operating cash flow Strong cash generation through the cycles US$ millions 700 600 500 400 300 200 100 0 2015 2016 2017 *Operating profit before working capital changes 19
Slide 20: Group balance sheet highlights
Group balance sheet highlights US$M 31-Dec-2017 31-Dec-2016 Non-current Assets 7,104 6,838 Current Assets 2,965 2,566 Total Assets 10,069 9,404 Non-current Liabilities 4,007 3,572 Current Liabilities 1,379 1,313 Total Liabilities 5,386 4,885 Shareholders’ Funds and Total Equity 4,683 4,519 20
Slide 21: Total liquid assets
Total liquid assets US$M 31-Dec-2017 31-Dec-2016 Cash and Bank Balances 2,005 1,626 Portfolio Investments, Equities and Bonds 529 560 Total 2,534 2,187 21
Slide 22: Net debt position
Net debt position US$M 31-Dec-2017 31-Dec-2016 Liquid Assets 2,534 2,187 Debt 4,554 4,091 Net Debt 2,020 1,904 22
Slide 23: Long Beach Container Terminal
Long Beach Container Terminal Positive P&L impact Phase 2 online from 4Q17 Post Phase 2 terminal design capacity 2.0m TEU – further expandable to 3.3m TEU as terminal is further utilised when Phase 3 completed Over 74% of US$650m budget spent, ongoing spend flat across periods 1H16 New terminal 2Q16
Slide 24: Ocean Alliance
Ocean Alliance First year complete Access to new markets Volumes attained in key jurisdictions Manage capex business risk through stable volumes from Ocean Alliance members Source: Alphaliner 24
Slide 25: Property investment
Property investment Long term but non-core property investments Wall Street Plaza ▪ Fair value gain of US$43.4 million for 2017 ▪ Valuation of US$270 million as at 31 December 2017 ▪ Performance is in line with expectations ▪ Vacancy rate of 1.3% as at end of 31 December 2017 ▪ Change in tax rate po
Slide 26: Transaction summary
Transaction summary Achieved pre-condition approvals of: ▪ European Commission anti-trust ▪ U.S. anti-trust ▪ COSCO SHIPPING Holdings shareholder approval Awaiting pre-condition approvals of: ▪ MOFCOM ▪ NDRC 26
Slide 27: Market outlook
Market outlook Supply constraining short term positives, attractive longer-term fundamentals Short term Medium term Long term More Synchronised Supply favourable Environmental global growth overhang demand vs policies Technology Alliances remains supply fundamentals Gradual industry wide Consolidati
Slide 28: Our strategy
Our strategy Fleet optimisation Investment Increased and ramp-up growth in our of Long Beach key Container diversified Terminal trade routes Shareholder value and returns Benefits of Balance sheet best-in-class well placed IT for growth infrastructure 28
Slide 29: Orient Overseas (International) Limited
eo Orient Overseas (International) Limited
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