Orient Overseas (international) Limited · HKEX:316
Orient Overseas (international) — H1 2014 Earnings Presentation
45 slides from Orient Overseas (international)'s earnings presentation, Aug 11, 2014
Slide 1: Orient Overseas (International) Ltd 2014 Interim Results
Orient Overseas (International) Ltd 2014 Interim Results 11th August 2014
Slide 2: OOIL Group 1H 2014 Summary
OOIL Group 1H 2014 Summary • Group Turnover increased by 7% to US$3,237 million • Group Operating Profit of US$211 million • Profit Attributable to Equity Holders of US$181 million • Earnings per share of US29.0 cents • Interim Ordinary Dividend of US7.5 cents (HK$0.585) per share 2
Slide 3: Financial and Operational Summary
Financial and Operational Summary • Group Operating Profit increased to US$211 million − Liner revenue increased by 4.3% to US$2,890 million − Liner Yield Management and Cost Efficiency drives improve − Achieved 4.5% EBIT margin in container transport and logistics segment − Property and Investments
Slide 4: Group Results Breakdown – 1H 2014
Group Results Breakdown – 1H 2014 US$M 1H14 1H13 var Container Transportation and Logistics 111.2 (22.6) 133.8 Others Wall Street Plaza Revaluation 9.7 (4.6) 14.3 Hui Xian Dividends and Distribution 41.4 9.1 32.3 Others 18.9 3.0 15.9 70.0 7.5 62.5 Total 181.2 (15.1) 196.3 4
Slide 5: EBIT Breakdown – 1H 2014
EBIT Breakdown – 1H 2014 2014 2013 2013 US$M Interim Interim Final Container Transportation and 145.3 2.8 75.1 Logistics - EBIT OOIL Activities - EBIT Wall Street Plaza Revaluation 9.7 (4.6) (6.9) Hui Xian Dividends and Distribution 41.4 9.1 10.2 Interest and Investments 20.7 0.1 20.1 Others 3.9 3.1
Slide 6: Group Balance Sheet Highlights – June 30, 2014
Group Balance Sheet Highlights – June 30, 2014 2014 2013 US$M Interim Final Non-current Assets 6,311 6,146 Current Assets 2,943 2,844 Total Assets 9,254 8,990 Non-current Liabilities 3,298 3,328 Current Liabilities 1,363 1,185 Total Liabilities 4,661 4,513 Shareholder‟s Funds 4,587 4,471 Non-control
Slide 7: Total Liquid Assets – 30 June 2014
Total Liquid Assets – 30 June 2014 US$M 30 Jun 2014 31 Dec 2013 Restricted Bank Balances 35 26 Cash and Bank Balances 1,955 1,912 Portfolio Investments, Equities and Bonds 465 473 Total 2,455 2,411 7
Slide 8: Net Debt Position – 30 June 2014
Net Debt Position – 30 June 2014 US$M 30 Jun 2014 31 Dec 2013 Liquid Assets 2,455 2,411 Debt 3,565 3,534 Net Debt 1,100 1,123 8
Slide 9: Debt-to-Equity Ratios – 30 June 2014
Debt-to-Equity Ratios – 30 June 2014 Gross Debt to Equity Net Debt to Equity Ratio Ratio 1.0 1.0 0.79 0.78 0.63 0.64 0.48 0.5 0.5 0.25 0.24 0.12 0.06 Net cash 0 0 2010 2011 2012 2013 1H 2014 2010 2011 2012 2013 1H 2014 9
Slide 10: Liner 1H Highlights
Liner 1H Highlights • Solid EBIT Margin - Effective yield management - Cost efficiency gains - Offsets market weakness 10
Slide 11: 1H Liner Performance Summary
1H Liner Performance Summary 1H 2014 1H 2013 var Loadable Capacity (TEU‟000) 3,657 3,555 2.9% Liftings (TEU‟000) 2,805 2,549 10.1% Load Factor 77% 72% 5.0% Total Revenue (US$ mil) 2,890 2,772 4.3% Revenue Per TEU 1,030 1,088 -5.3% EBIT Margin 4.5% 0.1% 4.4% 11
Slide 12: OOCL Operational Update
OOCL Operational Update YTD Q2 2014) Q22013 change Q2 2014) 12014 change 1H2014 1H2013 change LIFTINGS (TEU'S) Trans-Pacific 336,940 298,847 12.7% 336,940 308,262 9.3% 645,202 606,996 6.3% Asia-Europe 254,067 208,110 22.1% 254,067 226,717 12.1% 480,784 414,869 15.9% Trans-Atlantic 100,775 102,134 =
Slide 13: Bunker and Fuel Oil Costs – 1H 2014
Bunker and Fuel Oil Costs – 1H 2014 US$M 1H 2014 1H 2013 %▲ Total Bunker Costs (US$M) 529 572 (8%) Average Fuel Oil Price (US$ per TON) 595 626 (5%) Total Fuel Oil Consumption ('000 TON) 864 888 (3%) Lifting („000 TEU) 2,805 2,549 10% Total Bunker Consumption per TEU 0.31 0.35 (11%) 13
Slide 14: Bunker Consumption – 5 Years
Bunker Consumption – 5 Years 2010 2011 2012 2013 1H2014 Net Operating Capacity 383,855 415,790 452,246 496,106 505,147 (TEU) Lifting („000 TEU) 4,768 5,033 5,217 5,294 2,805 Total Fuel Oil Consumption 1,832 1,890 1,777 1,785 864 ('000 TON) 14
Slide 15: Bunker Consumption – 5 Years
Bunker Consumption – 5 Years 15
Slide 16: Cost 1H 2014
Cost 1H 2014 1H2014 1H2013 Operating Cost (1) 2,913 2,814 Other Cost (2) 204 211 Bunker Cost (3) 529 572 Total Cost excl. Bunker (4) = (1) + (2) – (3) 2,588 2,453 Total Unit Cost excl. Bunker (4) † total lifting 923 963 16
Slide 17: Unit Cost 1H 2014
Unit Cost 1H 2014 1H14 / 1H13 US$ / Per Lifting %▲ Cargo cost 3% Voyage cost -11% Vessel cost -11% Equipment and repositioning costs -15% Bunker cost -16% Total Unit Cost -6% 17
Slide 18: 2H 2013 / 2014 initiatives
2H 2013 / 2014 • Increase vessel utilization and lifting • Rationalization of Port Calls / Alliance & Partnership • G6/I3/Intra Asia • Operations • Marine Ops: Berth Time/Bunkering and Routing/Reefer Loading • Landside Ops: Vendors/Free Pool/Regional Trucking Desk • Ship Management: Slowsteam/Charte
Slide 19: OOCL Revenue and Lifting – 1H 2014
OOCL Revenue and Lifting – 1H 2014 Unit: US$‟000 Total US$2,890 mil Total 2,805,243 TEU 19
Slide 20: Total Operating Costs
Total Operating Costs 1H 2014 1H 2013 12% 13% 12% 12% 49% 5% 53% 6% 18% 20% Total operating costs - 1H 2014: US$2,913 mil; 1H 2013: US$2,814 mil Total cost excludes B & A 20
Slide 21: OOCL Static Slot Capacity Breakdown
OOCL Static Slot Capacity Breakdown No of Capacity Average % of Total As at 30 Jun 2014 Vessels (TEU) (TEU) Fleet Owned 54 403,374 7,470 80% Long Term Chartered 7 41,216 5,888 8% Short Term Chartered 39 124,077 3,181 25% Charter-Out (6) (63,520) (10,587) (13%) Total 94 505,147 5,374 100% 21
Slide 22: OOCL Fleet for Future Deliveries
OOCL Fleet for Future Deliveries Delivery schedule of vessels: 2013 8,888 TEU x 2 & 13,000 TEU x 8 2014 13,000 TEU x 2 (Delivered 1H 2014) 2015 8,888 TEU x 4 2015 : 4 x 8,888 TEU vessels built in Hudong–Zhonghua Shipbuilding (Group) Co. Ltd, PRC 22
Slide 23: Property Investment
Property Investment Wall Street Plaza – Fair value gain of US$9.7 million for 1H2014 – Valuation of US$180 million as at 30 June 2014 – Performance is in line with expectations – Vacancy rate of 7.0% as at end of 30 June 2014 Beijing Oriental Plaza – Directly and indirectly holding approx. 4.54% of
Slide 24: Market Update
Market Update 24
Slide 25: 1H 2014 Market
1H 2014 Market • Volume Growth – TP/AE/TA : Solid Growth – IA : Moving in the right direction – Sign of economic recovery ? • Load Factor - Headhaul – TP ILF : high 80s – AE ILF : mid 90s – OOCL recorded yoy gain • Freight Rate – Challenging due to supply – In general, lower than SPLY – Right direct
Slide 26: OOCL Operational Update
OOCL Operational Update YTD Q2 2014) Q22013 change Q2 2014) 12014 change 1H2014 1H2013 change LIFTINGS (TEU'S) Trans-Pacific 336,940 298,847 12.7% 336,940 308,262 9.3% 645,202 606,996 6.3% Asia-Europe 254,067 208,110 22.1% 254,067 226,717 12.1% 480,784 414,869 15.9% Trans-Atlantic 100,775 102,134 =
Slide 27: Trade Volume 1H 2014
Trade Volume 1H 2014 Trade YTD Jun2014 FY 2013 YTD Jun 2013 Transpacific EB 5.4% 3.4% 2.2% Asia Europe WB 8.1% 4.8% 1.2% Intra Asia (IADA) 4.8% * 5.0% 4.1% Trans Atlantic WB 7.1% * 4.8% 3.6% Updated 6-Aug-2014 * YTD May only for IADA and TAT Sources: JoC, CTS, IADA, 27
Slide 28: Trade Volume 2Q14
Trade Volume 2Q14 Trade 2Q 2014 FY 2013 2Q 2013 Transpacific EB 6.2% 2.2% 4.2% Asia Europe WB 9.5% 4.8% 2.5% Intra Asia (IADA) 6.7% * 5.0% 3.1% Trans Atlantic WB 10.6% * 4.8% 5.7% Updated 6-Aug-2014 * Apr-May only for IADA and TAT Sources: JoC, CTS, IADA, 28
Slide 29: Trade Volume 1Q14
Trade Volume 1Q14 Trade 1Q 2014 FY 2013 1Q 2013 Transpacific EB 4.6% 3.4% 4.4% Asia Europe WB 6.4% 4.8% -0.1% Intra Asia (IADA) 3.6% 5.0% 5.1% Trans Atlantic WB 4.5% 4.8% 4.8% Updated 8-Jun-2014 Sources: JoC, CTS, IADA, 29
Slide 30: Port Throughput of China and HK 1H 2014
Port Throughput of China and HK 1H 2014 Region 1H 2014 FY 2013 1H 2013 China 5.7% 6.7% 8.3% Hong Kong 3.5% -3.3% -7.6% China + HK 5.5% 5.5% 6.2% Updated 1-Aug-2014 Sources: 中国港口协会集装箱分会 Hong Kong Port Development Council 30
Slide 31: Port Throughput of China and HK 2Q 2014
Port Throughput of China and HK 2Q 2014 Region 2Q 2014 FY 2013 2Q 2013 China 5.9% 6.7% 7.2% Hong Kong 6.1% -3.3% -7.6% China + HK 5.9% 5.5% 5.5% Updated 2-Jul-2014 Sources: 中国港口协会集装箱分会 Hong Kong Port Development Council 31
Slide 32: Port Throughput of China and HK 1Q 2014
Port Throughput of China and HK 1Q 2014 Region 1Q 2014 FY 2013 1Q 2013 China 5.5% 6.7% 8.2% Hong Kong 0.8% -3.3% -7.5% China + HK 5.0% 5.5% 6.2% Updated 2-Jul-2014 Sources: 中国港口协会集装箱分会 Hong Kong Port Development Council 32
Slide 33: 2H 2014 Market
2H 2014 Market • Volume Growth Headhaul – TP ILF : low 90s – AE ILF : mid to high 90s • Freight Rate – Strong forward volume – Positive sentiment – New Buildings : fewer deliveries in 2H 33
Slide 34: Global Demand and Supply Forecasts
Global Demand and Supply Forecasts Updated 15-Jul-2014 34
Slide 35: Global Demand and Supply Forecasts
Global Demand and Supply Forecasts Updated 4-Nov-2013 35
Slide 36: Historical Growth in Trade Volume and GDP
Trade Growth Historical Growth in Trade Volume and GDP GDP Growth Sources: TP&TA – JoC AE – FEFC/Drewry/ELAA/CTS Updated 8-Aug-2014 36 GDP – IMF
Slide 37: Valuation
Valuation 37
Slide 38: OOIL Historical P/B Ratio
OOIL Historical P/B Ratio Post-crisis peak 1.59 X 1.32 X 1.10 X Average = 0.88 X 0.66 X 0.44 X Post-crisis trough 0.52 X Source: JPM Updated 6-Aug-2014 38
Slide 39: OOIL Historical P/B Ratio
OOIL Historical P/B Ratio 1.43 X 1.14 X Average = 0.84 X 0.55 X 0.25 X Source: JPM Updated 6-Aug-2014 39
Slide 40: Industry Operating Margin
Industry Operating Margin Updated 8-Aug-2014 40
Slide 41: Going Forward
Going Forward 41
Slide 42: 2H 2014 & 2015
2H 2014 & 2015 • Container Transport Business – Yield Management & Cost Efficiency initiatives continue – Full year effect of New Buildings – Full year effect of G6 global alliance – Better Supply and Demand Balance from 2016 • Investing into the future – Liner – MHRP – Logistics 42
Slide 43: Financial Prudency
Financial Prudency • Strong balance sheet / high liquidity − Net debt to equity ratio 0.24:1 − One of the lowest in container transportation industry − Relative competitiveness in financing − Initiative on Capex − Ready to deploy to achieve further growth 43
Slide 44: OOIL Group
OOIL Group Proven Track Record Clear Direction Shareholder Management Alignment Forward Looking Financial Prudency 44
Slide 45: 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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