Orient Overseas (international) Limited · HKEX:316
Orient Overseas (international) — H1 2018 Earnings Presentation
30 slides from Orient Overseas (international)'s earnings presentation, 2018
Slide 1: Orient Overseas (International) Limited Interim Results 2018
Orient Overseas (International) Limited Interim Results 2018
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 Revenue US$3.1bn Financial Operating profit US$50.5m highlights Loss for the period (US$10.3m) All COSCO pre-conditions met COSCO Offer period closed with high acceptance rate Transaction Long Beach Container Terminal divestiture Net Debt to Equity ratio of 0.44 Conservative gearing
Slide 4: Group result breakdown
Group result breakdown Restated US$M 30-Jun-2018 30-Jun-2017 Container Transportation and Logistics – EBIT (3.1) 28.7 EBIT margin (0.1%) 1.0% Property and Investments - EBIT Wall Street Plaza 44.4 33.9 Hui Xian 20.5 24.8 Interest, Investments and Others (3.2) 29.1 61.7 87.8 OOIL GROUP - EBIT 58.6 11
Slide 5: Group balance sheet highlights
Group balance sheet highlights US$M 30-Jun-2018 31-Dec-2017 Non-current Assets 6,802 7,104 Current Assets 2,683 2,965 Assets held for sale 453 - Total Assets 9,938 10,069 Non-current Liabilities 3,721 4,007 Current Liabilities 1,423 1,379 Liabilities directly associated with assets classified as hel
Slide 6: Balance sheet
Balance sheet Continue to maintain stronger than peer average balance sheet Competitive funding arrangements with diversified network of banks OOIL Net Debt to Equity Net Debt to Equity 3.5 3.04 3 2.5 2.02 2 1.82 1.55 1.59 1.5 1.26 0.42 0.43 0.44 0.92 0.95 1 0.32 0.56 0.28 0.5 0.39 0.44 0.25 0 0.12
Slide 7: Total liquid assets
Total liquid assets US$M 30-Jun-2018 31-Dec-2017 Cash and Bank Balances 1,589 2,005 Portfolio Investments, Equities and Bonds 607 529 Total 2,196 2,534 7
Slide 8: Net debt position
Net debt position US$M 30-Jun-2018 31-Dec-2017 Liquid Assets 2,196 2,534 Debt 4,229 4,554 Net Debt 2,033 2,020 8
Slide 9: Container transportation (excl. logistics)
Container transportation (excl. logistics) 1H 2018 1H 2018 1H 2017 / 1H 2017 %▲ Liftings ('000 TEU) 3,271 3,087 6% Revenue (US$M) 2,846 2,599 10% Revenue Per TEU (US$) 870 842 3% Load Factor (%) 82.5 85.6 3.1% pt Note: Results presented above include the discontinued operation, Long Beach Container
Slide 10: Slow and steady recovery
Slow and steady recovery Shanghai Container Freight Index Revenue per TEU (US$) US$ 1,200 1,040 1,350 1,000 936 861 870 773 800 600 1,150 400 200 950 0 2014 2015 2016 2017 1H18 750 Liftings (TEU’s) 7,000,000 550 6,000,000 5,000,000 4,000,000 3,000,000 350 2,000,000 1,000,000 0 SCFI 2014 Average 2015
Slide 11: Improving market fundamentals
Improving market fundamentals Meaningful supply side growth in 1H18 Supply vs demand fundamentals should improve in coming months Limited new build ordering, good for 2019 & 2020 GDP World Growth (%) Global Container Trade Demand vs Supply (%) 3.8% 3.9% 3.9% 9% 8% 3.2% 7% 6% 5% 4% 3% 2% 1% 0% 2013 2
Slide 12: Gross new building deliveries
Gross new building deliveries million TEU 9.2% < 7,499 TEU ships 1.8 1.73 7,500 -14,500NPX 8.5% 6.9% 1.6 > 13,300 TEU ships 1.47 1.46 1.4 5.9% 0.81 1.19 1.2 0.60 4.4% 4.6% 0.61 1.00 3.6% 1.0 0.94 0.85 0.66 0.8 0.48 0.53 0.6 0.55 0.70 0.55 0.60 0.4 0.36 0.28 0.34 0.2 0.21 0.32 0.22 0.25 0.17 0.19 0.1
Slide 13: Diversified revenue base
Diversified revenue base 1H18 1H17 Revenue by Trade (USS 000's) Revenue by Trade (US$ 000's) AsiaEurope AsiaEurope $583,932 $525,969 21% 20% TransPacific TransPacific $1,116,157 $971,709 39% 38% 13
Slide 14: Industry trade volume – YTD May 2018
Industry trade volume – YTD May 2018 YTD YTD YTD Trade 2018 vs 2017 2017 vs 2016 2016 v 2015 Trans Pacific EB 5.9% 4.6% 5.5% Asia Europe WB 0.7% 4.4% 2.9% Intra Asia 4.3% 3.9% N/A Trans Atlantic 2.5% 6.1% (0.4%) WB Sources: Datamyne and CTS 14
Slide 15: Asia-Europe westbound demand
AsiaEurope West bound demand Jan 2018 (1.4%) Jan 2017 7.4% Jan 2016 (2.5%) Feb 2018 26.3% Feb 2017 (7.5%) Feb 2016 (13.2%) Mar 2018 (14.9%) Mar 2017 7.6% Mar 2016 24.8% Apr 2018 4.6% Apr 2017 2.7% Apr 2016 10.5% May 2018 (3.2%) May 2017 9.0% May 2016 (0.2%) June 2018 June 2017 7.6% June 2016 2.8% Ju
Slide 16: Good management of controllable variables
Good management of controllable variables 1H 2018 / 1H 2017 %▲ Liftings ('000 TEU) 6% Revenue (US$M) 10% Revenue Per TEU (US$) 3% Variable costs: Cargo Cost 1% Repositioning costs 22% Contribution 5% Fixed costs: Bunker costs 19% Equipment costs 8% Vessel Voyage costs 0% 16
Slide 17: Operating costs 1H 2018
Operating costs 1H 2018 1H 2018 1H 2018 Per Lifting / 1H 2017 Proportion %▲ Total cost 3% 100% Cargo cost 1% 55% Equipment and Repo costs 7% 14% Vessel Voyage cost 0% 17% Bunker cost 19% 14% Note: Results presented above include the discontinued operation, Long Beach Container Terminal. 17
Slide 18: Bunker price - Sing 380c St (M)
100 200 300 400 500 600 700 - Jan-14 US$/t Mar-14 May-14 Jul-14 Sep-14 2016 Average Nov-14 Sing 380c St (M) Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 2017 Average 2014 Average Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Bunker price - Sing 380c St (M) Jul-17 Sep-17 Nov-17 Jan-18 2
Slide 19: Bunker
Bunker Fuel price increase outweighed efficiency gains 1H18 1H17 Consumption (tonnes) 981,760 980,574 Revenue / tonne US$3,173 US$2,889 Liftings / tonne 3.3 3.1 19
Slide 20: Trade wars
Trade wars Impossible to predict impact Global trade flows have always been evolving Entirely appropriate to be cautious Limited, if any, proven impact so far Goods shipped in containers often lower value Financial impact of tariffs small in US$ terms So may not reduce significantly, but could be a
Slide 21: Property investment
Property investment Long term but non-core property investments Wall Street Plaza ▪ Fair value gain of US$39.9 million for 2018 interim ▪ Valuation of US$310 million as at 30 June 2018 ▪ Continues to record steady results Hui Xian REIT ▪ US$14.3 million on balance sheet as at 30 June 2018 ▪ US$14.7
Slide 22: COSCO / OOIL transaction
COSCO / OOIL transaction Offer to OOIL Shareholders 6 July 2018 to 27 July 2018 98.43% of OOIL issued share capital tendered COSCO Shipping Holdings (1919.HK) : 88.53% SIPG : 9.9% OOIL (0316.HK) listing a key priority List of incoming new shareholders: CK Hutchison first batch of up to 4.99% Rongshi
Slide 23: COSCO / OOIL transaction
COSCO / OOIL transaction COSCO’s six commitments (1) Keep the existing OOIL branding (2) Retain the listing status of OOIL (3) Maintain OOIL’s global headquarters functions and presence in Hong Kong (4) Maintain the reporting lines (5) Commit to the continuity and stability of OOIL management team,
Slide 24: COSCO / OOIL transaction
COSCO / OOIL transaction Key management appointments now announced Multiple working groups identifying synergies Network optimisation Joint procurement Information Technology Equipment utilisation COSCO Shipping Holdings (1919.HK) will ensure the identification and maximisation of synergy benefits V
Slide 25: COSCO Shipping Holdings Organisational Structure
COSCO Shipping Holdings Organisational Structure VP VP 25
Slide 26: COSCO / OOIL transaction
COSCO / OOIL transaction COSCO Shipping Group COSCO SHIPPING Holdings (1919.HK) COSCO COSCO OOIL SHIPPING Shipping (0316.HK) Ports Ltd Lines (1199.HK) 26
Slide 27: OOIL Board Seats
OOIL OOIL Board Seats Capt. Xu Lirong Chairman & Executive Director 4 x New cornerstone Independent Non-Executive Directors Executive Directors investors: Huang Xiaowen 2x CEO (OOIL) Continuing Wang Haimin Co-CEO(OOCL) Zhang Wei Executive Director 3 x New Andy Tung Co-CEO(OOCL) Zhang Mingwen Lammy L
Slide 28: Conclusion
Conclusion Slow and steady recovery continues Cost challenges remain Trade war impact unknown Industry consolidation creates better hope of more stable environment OOIL and COSCO will continue to maintain high operating standards, high standards of service and leading IT capability Effectively combi
Slide 29: Page 29
cosco SHIPPING NSA We take it personally TOGETHER WE ACHIEVE GREATER SUCCESS
Slide 30: Orient Overseas (International) Limited
eo Orient Overseas (International) Limited
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