Orient Overseas International Limited (OOIL), the owner of Hong Kong-based ocean carrier Orient Overseas Container Line (OOCL), announced its financial and operating results for the last year.
In 2023, the company reported revenues of US$8.34 billion, earnings before interest, taxes, depreciation and amortization (EBITDA) of US$2.26 billion, earnings before interest and taxes (EBIT) of US$1.41 billion and profit of US$1.37 billion. At the end of 2023, OOIL’s operating cash flow was US$617 million.
All the financial figures of OOIL in 2023 were significantly lower than the corresponding numbers in 2022, as seen in the following table:
“The exceptionally robust container shipping market that we witnessed during the pandemic is now far behind us, and we have returned to a rather normal yet uncertain year 2023,” said the company in its yearly results announcement.
OOIL noted, “The cargo demand recovery was not as strong as many anticipated, affected by high inflation, slowdown in economic growth of advanced economies, as well as the consumer spending patterns shifting in the post-pandemic. As carriers’ schedule became more reliable, retailers opted towards a just-in-time approach when restocking, thereby delaying demand to a certain extent. On the supply side, with the alleviation of bottlenecks , and the continuous delivery of new ships, the change in supply has undoubtedly exceeded in demand and the continuous decline of freight rates.”
Meanwhile, OOCL slightly increased its container volumes in 2023 reaching 7.34 million TEUs from 7.13 million TEUs in 2022.
Moreover, OOIL reported that earnings per ordinary share in 2023 was US$2.07 in a huge drop from 2022, when earnings per ordinary share was US$15.09.
The Board of Directors has recommended that the dividend for full year 2023 is approximately 50% of the profit attributable to equity holders at approximately US$687 million, with proposed payment of a final dividend of US$0.145 per ordinary share and a second special dividend of US$0.036 per ordinary share for 2023.
In order to optimise the capital structure of the company, the Board recommends the revision of the Dividend Policy so as to have a target annual dividend payout of 30% to 50% of the consolidated net profit attributed to the company shareholders in the financial years of 2024, 2025 and 2026, whether as interim and/or final dividends, subject to, inter alia, the financial performance, liquidity position, future plans and working capital requirements of the company and the prevailing economic, financial, business and regulatory circumstances.