Orient Overseas (International) Limited (“OOIL”) today announced a profit from operations of US$903.0 million for 2020, compared to a profit of US$195.2 million in 2019. Profit attributable to equity holders for 2020 was US$902.7 million (2019: US$1,348.8 million, including profit on disposal of Long Beach Container Terminal of US$1,153.6 million).
Earnings per ordinary share in 2020 was US144.3 cents, whereas earnings per ordinary share in 2019 was US215.5 cents.
The Board of Directors has recommended the payment of a final dividend of US50.26 cents per ordinary share and a special dividend of US86.6 cents per ordinary share for 2020.
In order to optimise the capital structure of the Company, enhance its investment value, and further improve shareholder returns, the Board of Directors recommends the revision of the Dividend Policy (1) so as to have a target annual dividend payout of 40% of the consolidated net profit attributed to the shareholders of the Company in the financial years 2021, 2022 and 2023, and (2) such that the Company’s targeted total annual dividend payment shall not be less than US$400 million in each of the aforesaid financial years, 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.
The business environment in 2020 was exceptionally complex and volatile. Facing with tremendous challenges at all times, the Company needed to quickly adapt to the sudden and severe swings in demand while maintaining a high level of service. In particular, the last few months of 2020 saw a variety of complex situations, such as port congestion, operational delays due to bad weather, and a slowdown in the flow of the repositioning of container boxes in many places, which the OOIL teams actively and properly handled. In order to meet the rapidly increasing demand for freight, OOIL increased the fleet capacity on all its service routes, doing everything possible to meet the needs of customers and guaranteeing the stability of the container logistics supply chain.
In 2020, OOIL continued to benefit from increased cooperation and synergy with COSCO SHIPPING Lines, which helped the Company to handle the challenges of the year in the most professional and effective manner. In this Dual Brand context, OOIL expanded its presence into new routes, servicing many emerging markets, not least Latin America, and building up its global coverage further.
OOIL placed orders for twelve 23,000 TEU container vessels during 2020, which are scheduled to be delivered during 2023-2024. Not only will these modern, efficient vessels improve its cost structure and services in the Asia-Europe trade, but they will also enhance the Company’s competitiveness in the global market.
OOIL continues to advance its longstanding track record as a leader in technology and digital innovation. It launched its Freightsmart platform, which will provide instant quotation and booking, and also inaugurated IQAX, a wholly-owned subsidiary, which will play a leading role in driving the digital transformation of the container shipping industry.
Its logistics business, OOCL Logistics, also had a fruitful 2020. It strengthened its business in rail services between China and Europe, and its Air Freight Forwarding. The warehousing and distribution activities also increased, and it added new depot and warehousing capacity in Thailand and Vietnam. The cooperation between its logistics business and liner activities will help to drive the groupwide strategic growth plan for end-to-end services.
OOIL continues to place a high priority on environmental, social and corporate governance. It followed the new IMO 2020 regulations, continued to pioneer the application of various green technologies, and overcame the difficulties during the pandemic to properly address the problem of crew change.
All in all, 2020 was probably the most difficult and complex year ever for global business operations due to COVID-19. OOIL is grateful for the professionalism and hands-on engagement of all its employees, which has allowed the Company to live up to its customers' expectations, ensure the free flow of goods along the global container supply chain, and achieve strong financial results that continue to create value for shareholders.