Orient Overseas posts H1 profit upswing

Orient Overseas (International) Limited and its subsidiaries (the group announced a profit attributable to equity holders of US$1,284.6 million for the six month period ended June 30th, 2010.

This result includes the profit on the sale of the Group former PRC property development business conducted under Orient Overseas Developments Ltd. (ODL to CapitaLand China (RE) Holdings Co. Ltd., the details of which have been announced previously. The net profit on the sale, after associated costs, was US$1,004, ±4 million.

The Group profit after tax for the period from continuing operations, being before the inclusion of the profit from the sale of OODL, was US$287.3 million. This represents an increase of US$506.6 million compared to the loss of US$219.3 million for the equivalent operations in the first six months of 2009.

The Board of Directors is pleased to announce an interim dividend for 2010 of US11.5 cents (HK89.7 cents) per ordinary share. The dividend will be paid on September 21st, 2010 to those ordinary shareholders whose names appear on the register on September 6th, 2010.

In addition the Board of Directors has also decided to declare a special dividend of US40.0 cents (HK312.0 cents) per ordinary share. This special dividend represents approximately twenty-five per cent of the net profit on the sale of OODL.

The Chairman of OOIL, Mr. C C Tung, said, following last year extremely difficult trading conditions, 2010 started positively for the container transportation sector with an improved supply/demand balance and upward pressure on freight rates. Despite the modest pace of the global economic recovery, we have seen rapid growth in demand over the first six months of the year.

The strong demand has assisted with the absorption of new-build capacity delivering in the first half of the year, and has helped increase and hold rates at levels that will see the industry return to profitability in 2010. Slow steaming, while primarily undertaken for the environmental and cost-saving benefits, has also reduced the level of excess capacity in the industry.