Orient Overseas (international) Limited · HKEX:316
Orient Overseas (international) — H1 2015 Earnings Presentation
42 slides from Orient Overseas (international)'s earnings presentation, Aug 10, 2015
Slide 1: 1H 2015 Results Presentation
Orient Overseas (International) Ltd 1H 2015 Results Presentation August 10th 2015 1
Slide 2: 2015 1H Results Highlights
2015 1H Results Highlights Group Profit After Tax US$238 mil 32% YoY Liner Logistics Segment US$184 mil 65% YoY Liner Logistics EBIT 7.3% 62% from 4.5% to 7.3% Interim Ordinary Dividend US9.6 cents per share 2
Slide 3: 2015 1H Group Highlights
2015 1H Group Highlights • Achieved EBIT Margin 7.3% – Yield Management – Continuous Cost efficiency gains • Forward growth – 6 x 20,000 TEU class NB delivery 2017 – CAGR growth 10.9% 2015 – 2017 • Balance Sheet Management – Net Debt to Equity moving up to 30% – Will remain Best in Class 3
Slide 4: Group Results Breakdown
Group Results Breakdown US$M 30-Jun-2015 30-Jun-2014 var Container Transportation and Logistics 183.6 111.2 72.4 Property and Investments Wall Street Plaza Revaluation 9.8 9.7 0.1 Hui Xian Dividends ($7.9M & shares) and 27.2 41.4 (14.2) Cash Distribution ($2.5M) Interest and Investments 19.9 21.9 (2
Slide 5: EBIT Breakdown
EBIT Breakdown US$M 30-Jun-2015 30-Jun-2014 Container Transportation and Logistics - 222.4 145.3 EBIT Property and Investments - EBIT Wall Street Plaza Revaluation 9.8 9.7 Hui Xian Dividends and Distribution 27.2 41.4 Interest and Investments 19.9 21.9 Others 3.6 2.7 60.5 75.7 OOIL GROUP - EBIT 282.
Slide 6: Group Balance Sheet Highlights
Group Balance Sheet Highlights US$M 30-Jun-2015 31-Dec-2014 Non-current Assets 6,761 6,450 Current Assets 3,212 3,184 Total Assets 9,973 9,634 Non-current Liabilities 3,901 3,654 Current Liabilities 1,233 1,345 Total Liabilities 5,134 4,999 Shareholders’ Funds 4,839 4,635 Non-controlling Interests -
Slide 7: Total Liquid Assets
Total Liquid Assets US$M 30-Jun-2015 31-Dec-2014 Restricted Bank Balances 74 55 Cash and Bank Balances 2,183 2,166 Portfolio Investments, Equities and Bonds 532 469 Total 2,789 2,690 7
Slide 8: Net Debt Position
Net Debt Position US$M 30-Jun-2015 31-Dec-2014 Liquid Assets 2,789 2,690 Debt 4,222 3,985 Net Debt 1,433 1,295 8
Slide 9: Debt-to-Equity Ratios
Debt-to-Equity Ratios Gross Debt to Equity Net Debt to Equity Ratio Ratio 1.0 1.0 0.86 0.87 0.79 0.63 0.64 0.48 0.5 0.5 0.30 0.28 0.25 0.12 0.06 Net Cash 0 0 2011 2012 2013 2014 1H 2015 2011 2012 2013 2014 1H 2015 9
Slide 10: Property Investment
Property Investment Wall Street Plaza – Fair value gain of US$9.8 million for 1H2015 – Valuation of US$190 million as at 30 June 2015 – Performance is in line with expectations – Vacancy rate of 5.6% as at end of 30 June 2015 Beijing Oriental Plaza – Directly and indirectly holding approx. 4.4% of H
Slide 11: Beijing Oriental Plaza – 30 Jun 2015
Beijing Oriental Plaza – 30 Jun 2015 31-Dec-2014 : 50% OOIL 31-Dec-2014 : 50% Dividend in Specie 12.5% 30-Jun-2015 : 37.5% 30-Jun-2015 : 62.5% Hui Xian Holdings 4.4% Hui Xian REIT Properties 11
Slide 12: 2015 OOCL
2015 OOCL • Solid Liner margin performance 1H • Yield Management and cost saving gains (volume vs margin) • 2014 Congestion disruption abated • Service network improvement • Improving G6 performance 12
Slide 13: OOCL Revenue and Lifting – 1H2015
OOCL Revenue and Lifting – 1H2015 Total US$2,706 mil Total 2,740,691 TEU 13
Slide 14: Liner Performance
Liner Performance US$ / TEU 1H 2015 1H 2014 %▲ Liftings ('000 TEU) 2,741 2,805 -2.3% Revenue Per TEU (US$) 987 1,030 -4.2% Net Operating Capacity (TEU) 589,772 505,147 16.8% EBIT Margin 7.3% 4.5% 62% 14
Slide 15: OOCL Operational Update
OOCL Operational Update* *Note: Unaudited operational updates 15
Slide 16: Total Operating Costs
Total Operating Costs 1H 2015 1H 2014 12% 14% 12% 13% 55% 5% 53% 6% 12% 18% Note: The cost of OOCL Logistics is included in Cargo Cost 16
Slide 17: Unit Operating Cost Saving 1H 2015
Unit Operating Cost Saving 1H 2015 1H15 1H15 / 1H14 US$ / Per Lifting Proportion %▲ Total cost 100% -9% Cargo cost 55% -4% Equipment and repo costs 14% 6% Vessel cost 13% -5% Bunker cost 12% -37% Voyage cost 6% 6% 17
Slide 18: Bunker Cost
Bunker Cost US$M 1H 2015 1H 2014 %▲ Total Bunker Costs (US$M) 326 529 (38%) Average Bunker Price (US$ per TON) 370 601 (38%) Total Bunker Consumption ('000 TON) 880 879 0% Net Operating Capacity ('000 TEU) 590 505 17% Bunker consumption per loadable capacity improved by 7% 18
Slide 19: Bunker Consumption – 5 Years
Bunker Consumption – 5 Years 19
Slide 20: Sustained Capacity Growth: OOCL Fleet for Future Deliveries
Sustained Capacity Growth : OOCL Fleet for Future Deliveries 2013 13,200 TEU x 8 and 8,888 TEU x 2 2014 13,200 TEU x 2 2015 8,888 TEU x 4 Cap growth 2016 13,200 TEU X 4 (NYK) 10.9% CAGR 2017 20,000 TEU Class X 6 20
Slide 21: Net Operating Capacity Breakdown
Net Operating Capacity Breakdown No of Capacity Average % of Total As at 30 Jun 2015 Vessels (TEU) (TEU) Fleet Owned 54 405,444 7,508 69% Long Term Chartered 7 41,216 5,888 7% Short Term Chartered 53 195,944 3,697 33% Charter-Out (4) (52,832) (13,208) (9%) Total 110 589,772 100% 2015-17 Static Capac
Slide 22: Market Review and Update
Market Review and Update 22
Slide 23: Global Demand and Supply Forecasts
Global Demand and Supply Forecasts Aug 5th 2015 23
Slide 24: 2015 1H Market Highlights
2015 1H Market Highlights Positives VS Negatives • Positive trade growth • AE trade growth disappointing • Strong 1Q freight rate • Steep rate decline 2Q • Bunker Cost continues • Oversupply to be favorable • Congestion eases (cost vs freight) • VMS (Vessel Maintenance Schedule) and deployment adjus
Slide 25: Market Update by Trade
Market Update by Trade • TP (headhaul) – Solid volume growth (+5.6%) and Load Factor – Solid Contract rates / Weak Spot Market • AE (headhaul) – Negative volume growth (-5.0%) – Weak Spot market / Market adjustment underway • IA – Moderate volume growth (+2.0%) – Market rate vs deployment adjustment
Slide 26: Trade Volume 1H2015
Trade Volume 1H2015 Trade 1H 2015 FY 2014 1H 2014 Transpacific EB 5.6% 5.8% 5.3% Asia Europe WB -5.0% 7.5% 8.7% Intra Asia (IADA) 2.0% 1.9% 3.9% Trans Atlantic WB 5.3% 7.6% 7.0% Sources: JoC, CTS, IADA Updated 8-Aug-2015 26
Slide 27: Market Rates Softening
Market Rates Softening ﹑ Updated 5-Aug-2015 27
Slide 28: New Building Deliveries - Static Slots
New Building Deliveries - Static Slots Delivered Planned 2,000,000 1,902,006 1,800,000 1,600,000 1,446,874 1,381,180 Sum of TEU 1,260,749 1,307,193 1,400,000 988,766 1,200,000 522,660 855,720 1,000,000 779,887 800,000 487,470 1,149,844 403,889 600,000 633,084 294,856 400,000 274,720 451,370 200,000
Slide 29: Market Weekly Capacity Growth - Upsizing
Market Weekly Capacity Growth - Upsizing Source: Alphaliner, IADA Updated Jul 2015 29
Slide 30: 2015 / 2016 Market
2015 / 2016 Market 2015 : Yield management and Cost efficiency gains against weak market 2016 : Better supply and demand balance 30
Slide 31: Group Strategy
Group Strategy • Maintain OOCL status as top tier industry performer • Ready and Able to Invest into the Future • Vessels • Long Beach Container Terminal • IT as a differentiator • Logistics Buildout Continues 31
Slide 32: LBCT: Long Beach Container Terminal
LBCT : Long Beach Container Terminal 8-6-2015 32
Slide 33: LBCT Long Beach Container Terminal
LBCT Long Beach Container Terminal • Aug to Nov 2015 - Container flow testing • Feb 2016 - Mini Terminal completed • Mar 2016 - Ready to go live : • Mar Export handling • Apr WB Train and 1st commercial vessel • May 1st EB train • 2019 - Project complete 33
Slide 34: Project Completion 2019
Project Completion 2019 34
Slide 35: OOCL Logistics
OOCL Logistics 35
Slide 36: OOCL Logistics Globally
ffices/sales offices ‘ehouses, 21 locations USA and Canada’ ‘(a SS EastAs outheast Asia * 9 offices/sales office a and ; ) ¢ 14 warehouse locatio es/sales offices 88 _ anne locations South America (Brazil * 11 agent offices 2014 Geographical Expansion in: Central America, Italy “ .
Slide 37: OOCL Logistics
OOCL Logistics Business segments : • ISCMS • Freight Forwarding • Domestic Transportation 37
Slide 38: IT
IT IT 38
Slide 39: 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 transship
Slide 40: Financial Prudence
Financial Prudence • Robust Balance Sheet and High Liquidity Net debt to equity ratio 0.30 : 1 One of the lowest in the container transportation industry Relative competitiveness on financing Ability to retain initiative on Capex US$ 2.8 billion of Liquid Assets Interest rate hike hedge
Slide 41: OOIL Group
OOIL GROUP Proven Track Record Clear Direction Double Digit Capacity Growth Shareholder Management Alignment Forward Looking Financial Prudence 41
Slide 42: 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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