Orient Overseas (international) Limited · HKEX:316
Orient Overseas (international) — FY2014 Earnings Presentation
44 slides from Orient Overseas (international)'s earnings presentation, Mar 9, 2015
Slide 1: Orient Overseas (International) Ltd Media Presentation 2014 Annual Results
Orient Overseas (International) Ltd Media Presentation 2014 Annual Results March 9th 2015 1
Slide 2: OOIL Profile
OOIL Profile • Headquartered in Hong Kong • Principal business activities: container transport and logistics • Over US$6.5 billion revenue in 2014 • Shareholders Equity: US$4.6 billion • 320 offices in 70 countries • Employing over 9,500 staff globally • Operating 98 vessels as of Dec 2014 2
Slide 3: OOCL Global Service Network
OOCL Global Service Network Intra Europe 12 services 7 services Europe North Intra Asia 60 services America 7 services 20 services Asia 10 services Australasia Total 116 weekly sailings Updated 4-Mar-2015 3
Slide 4: Orient Overseas (International) Limited
Orient Overseas (International) Limited - 2014 Annual Results - Market Review and Update - Outlook 2015 - Stock (0316.hk) Update 4
Slide 5: OOIL 2014 Annual Results
OOIL 2014 Annual Results 5
Slide 6: OOIL Annual Results Summary - 2014
OOIL Annual Results Summary - 2014 • Group Revenue US$ 6,522 million • Group EBIT US$ 349 million • Profit Attributable to Equity Holders was US$ 271 million • OOIL Transport and Logistics report EBIT of US$ 249 million representing an operating margin of 4% • Earning per share US 43.2 cents • Final
Slide 7: OOIL Annual Results Summary - 2014
OOIL Annual Results Summary - 2014 • Encouraging industry volume growth in 2014 especially major East West Container Trades • Liner Revenue increased by 3.5 % to US$5,807 million • Liner lifting increase by 5.5% while load factor improved to 76% from 73% • The Group took delivery of two 13,208 teu “
Slide 8: Group Results Breakdown
Group Results Breakdown US$M 2014 2013 var Container Transportation and Logistics 178.7 17.6 161.1 Others Wall Street Plaza Revaluation 9.7 (6.9) 16.6 Hui Xian Dividends ($7.9M & shares) and 43.8 10.2 33.6 Cash Distribution ($3.7M) Interest and Investments 41.5 20.1 21.4 Others (3.3) 6.1 (9.4) 91.7
Slide 9: EBIT Breakdown
EBIT Breakdown US$M 2014 2013 Container Transportation and Logistics 249.4 75.1 OOIL Activities - EBIT Wall Street Plaza Revaluation 9.7 (6.9) Hui Xian Dividends and Distribution 43.8 10.2 Interest and Investments 41.5 20.1 Others 4.2 9.5 99.2 32.9 OOIL GROUP - EBIT 348.6 108.0 Finance Costs (54.0)
Slide 10: Group Balance Sheet Highlights
Group Balance Sheet Highlights US$M 2014 2013 Non-current Assets 6,450 6,146 Current Assets 3,184 2,844 Total Assets 9,634 8,990 Non-current Liabilities 3,654 3,328 Current Liabilities 1,345 1,185 Total Liabilities 4,999 4,513 Shareholders’ Funds 4,635 4,471 Non-controlling Interests - 6 Total Equit
Slide 11: Total Liquid Assets
Total Liquid Assets US$M 31 Dec 2014 31 Dec 2013 Restricted Bank Balances 55 26 Cash and Bank Balances 2,166 1,912 Portfolio Investments, Equities and Bonds 469 473 Total 2,690 2,411 11
Slide 12: Net Debt Position
Net Debt Position US$M 31 Dec 2014 31 Dec 2013 Liquid Assets 2,690 2,411 Debt 3,985 3,534 Net Debt 1,295 1,123 12
Slide 13: Debt-to-Equity Ratios
Debt-to-Equity Ratios Gross Debt to Equity Net Debt to Equity Ratio Ratio 1.0 1.0 0.86 0.79 0.63 0.64 0.5 0.48 0.5 0.28 0.25 0.12 0.06 Net cash 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 13
Slide 14: Liner Revenue and Lifting
Liner Revenue and Lifting Revenue by Trade Lifting by Trade Unit: US$’000 Trans-Pacific Intra-Asia/ 1,288,509 Trans-Pacific Australasia TEU 1,972,630 $2,061,016 23% 34% 36% Intra-Asia/ Australasia 2,932,360 TEU Asia-Europe 52% 979,659 TEU Trans- 18% Atlantic Trans- $600,559 Asia-Europe Atlantic 10%
Slide 15: Container Transportation Performance
Container Transportation Performance 2014 2013 %▲ Liftings ('000 TEU) 5,586 5,294 5.5% Revenue (US$M) 5,807 5,609 3.5% Revenue Per TEU (US$) 1,040 1,060 -1.9% Net Operating Capacity (TEU) 529,662 496,106 6.7% Load Factor (%) 76% 73% 4.1% 15
Slide 16: Cost Improvement 2014
Cost Improvement 2014 2014 2013 Operating Cost (1) 5,861 5,759 Other Cost (2) 432 415 Bunker Cost (3) 1,014 1,127 Total Cost excl. Bunker (4) = (1) + (2) – (3) 5,279 5,047 Total Unit Cost excl. Bunker (4) ÷ total lifting 945 953 16
Slide 17: Total Operating Costs
Total Operating Costs 2014 2013 13% 13% 13% 13% 49% 52% 5% 5% 17% 20% 17
Slide 18: Unit Operating Cost Saving 2014
Unit Operating Cost Saving 2014 2014 / 2013 US$ / Per Lifting %▲ Cargo unit cost 3% Voyage unit cost -5% Vessel unit cost -6% Equipment and repositioning unit costs -10% Bunker unit cost -15% Total Unit Cost -4% 18
Slide 19: Bunker and Fuel Oil Cost
Bunker and Fuel Oil Cost 2014 2013 Total Bunker Costs (US$M) 1,014 1,127 (10%) Average Fuel Oil Price (US$ per TON) 572 615 (7%) Total Fuel Oil Consumption ('000 TON) 1,724 1,785 (3%) Lifting (‘000 TEU) 5,586 5,294 6% Total Fuel Oil Consumption per TEU 0.31 0.34 (9%) 19
Slide 20: Bunker Consumption – 5 Years
Bunker Consumption – 5 Years 2010 2011 2012 2013 2014 Net Operating Capacity 383,855 415,790 452,246 496,106 529,662 (TEU) Total Fuel Oil Consumption 1,832 1,890 1,777 1,785 1,724 ('000 TON) Lifting (‘000 TEU) 4,768 5,033 5,217 5,294 5,586 20
Slide 21: Bunker Consumption – 5 Years
Bunker Consumption – 5 Years 21
Slide 22: Bunker Price and Crude Oil Price
Bunker Price 800 200 $750 180 700 160 600 140 Crude Oil Price (US$ per barrel) Bunker Price (US$ per M Ton) 124 120 500 114 103 103 105 102 97 97 94 94 94 100 96 94 92 89 89 94 400 85 90 86 80 78 74 349 74 74 76 75 65 66 305 60 60 300 57 57 45 51 42 40 $236 200 Singapore Quarter Average Price Rotter
Slide 23: Net Operating Capacity Breakdown
Net Operating Capacity Breakdown No of Capacity Average % of Total As at 31 Dec 2014 Vessels (TEU) (TEU) Fleet Owned 53 395,731 7,467 75% Long Term Chartered 7 41,216 5,888 8% Short Term Chartered 44 156,235 3,551 30% Charter-Out (6) (63,520) (10,587) (13%) Total 98 529,662 5,405 100% 23
Slide 24: OOCL Fleet for Future Deliveries
OOCL Fleet for Future Deliveries Delivery schedule of vessels: 2013 13,200 TEU x 8 and 8,888 TEU x 2 2014 13,200 TEU x 2 2015 8,888 TEU x 4 24
Slide 25: Property Investment
Property Investment Wall Street Plaza – Fair value gain of US$ 9.7 million for 2014 – Valuation of US$ 180 million as at 31 December 2014 – Performance is in line with expectations – Vacancy rate of 5.9% as at 31 December 2014 Beijing Oriental Plaza – Directly and indirectly holding approx. 4.47% of
Slide 26: Market Review and Update
Market Review and Update 26
Slide 27: Macro Environment 2014
Macro Environment 2014 Overall • Encouraging trajectory in the US • Weakness in Europe / Effects of ECB QE remain to be seen • China structural reforms continue • Mixed performances in Emerging markets Trade Growth • Healthy East West Trade volume • Disappointing Intra Asia short haul, strong long h
Slide 28: Industry Environment 2014
Industry Environment 2014 - Alliances - P3/2M - O3 - CKYH-E - G6 Globalization/Service Center - Congestion (Terminals and Inland) - Weather/Labor/Infrastructure - Disruption/Operational Challenges - Cost - Bunker Price Fluctuation 28
Slide 29: Industry By Trade 2014 Volume Growth
Industry By Trade 2014 • TP: Solid Volume Growth Volume • AE: Strong Volume Growth • TA: Strong Volume Growth Growth • IA: Disappointing 2H • TP: Strong at 90s Load • AE: Strong at 90s despite new deliveries Factor • TA: High 90s • IA: Pressure given cascade and slower-than-expected volume (Headhaul
Slide 30: TP and IA Capacity Cascading
TP and IA Capacity Cascading Updated 3-Mar-2015 Sources: Alphaliner, IADA
Slide 31: Trade Volume 2014
Trade Volume 2014 Trade 1H14 2H14 FY 2014 FY 2013 Transpacific EB 3.8% 6.6% 5.2% 2.9% Asia Europe WB 8.6% 6.2% 7.4% 5.2% Intra Asia (IADA) 3.9% 0.0% 1.9% 5.0% Trans Atlantic WB 6.8% 8.5% 7.7% 3.8% Sources: JoC, CTS, IADA, 31
Slide 32: Port Throughput of China and HK
Port Throughput of China and HK FY 2014 Region FY 2014 FY 2013 China 6.1% 6.7% Hong Kong -0.4% -3.3% China + HK 5.4% 5.5% Updated 3-Mar-2015 Sources: 中国港口协会集装箱分会 Hong Kong Port Development Council 32
Slide 33: New Vessel Orders
New Vessel Orders Source: News media Updated 5-Mar-2015 33
Slide 34: New Building Deliveries - Static Slots
New Building Deliveries - Static Slots Delivered Planned by TEU range 300 253 250 221 203 Number of ships 64 165 200 38 46 65 66 150 52 41 33 100 30 133 123 50 138 83 24 0 2 2013 2014 2015 2016 2017-18 1,904,619 2,000,000 1,446,874 1,381,180 1,500,000 1,170,162 983,462 Sum of TEU 523,660 1,000,000 8
Slide 35: Outlook 2015
Outlook 2015 35
Slide 36: Industry Outlook 2015
Industry Outlook 2015 • Kickoff 2015 By Trade • TP: Freight better than 2014 / Early Birds • AE/IA: Mixed but no worse than 2014 • Newbuilding deliveries to peak in 2015 • Port congestion should ease in 1Q 2015 • Asia congestions being addressed 4Q 2014 • US West Coast ILWU being resolved • Inland i
Slide 37: Upside / Downside
Upside / Downside Downside - Eurozone / Commodity based economies falter - 2015 almost 12% NB deliveries - Cost of capital / sources of capital uncertain Upside - US trajectory stable - 2016 NB deliveries below 6% - Supply/Demand stabilizing 2016 - Congestion/Disruption easing - Alliance arrangement
Slide 38: Global Demand and Supply Forecasts
Global Demand and Supply Forecasts Net capacity growth Updated 2-Mar-2015 38
Slide 39: Global Demand Forecast
Global Demand Forecast Updated 16-Nov-2014 39
Slide 40: Liner Operating Focus
Liner Operating Focus - Yield Management - Differentiation / Segmentation - Cargo Selection - Profitability - Cost Efficiency - Alliance/Partnership - Deployment - Continuous Shoreside / Shipboard Efficiency drive - IT Development - Forward Looking Management Tool 40
Slide 41: Group Strategy
Group Strategy • Maintain OOCL status as top tier industry performer • Ready and Able to Invest into the Future • Vessels • MHRP • IT as a differentiator • Logistics Buildout Continues 41
Slide 42: Financial Prudence
Financial Prudence • Robust Balance Sheet and High Liquidity Net debt to equity ratio 0.28:1 One of the lowest in the container transportation industry Relative competitiveness on financing Ability to retain initiative on Capex US$ 2.7 billion of Liquid Assets Interest rate hike hedge MA
Slide 43: OOIL Group
OOIL Group Proven Track Record Clear Direction Shareholder Management Alignment Forward Looking Financial Prudence 43
Slide 44: 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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