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    316   BMG677491539

ORIENT OVERSEAS (INTERNATIONAL) LIMITED

(316)
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SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector news

Orient Overseas International : 2020 Results Announcement

03/25/2021 | 11:31pm EST

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

ORIENT OVERSEAS (INTERNATIONAL) LIMITED 東方海外(國際)有限公司*

(Incorporated in Bermuda with members' limited liability)

(Stock code: 316)

2020 RESULTS ANNOUNCEMENT

The Directors of Orient Overseas (International) Limited (the "Company" or "OOIL") announce the results of the Company and its subsidiaries (the "Group") for the year ended 31st December 2020 as follows:

Consolidated Profit and Loss Account For the year ended 31st December 2020

US$'000

Note

2020

2019

Revenue

4

8,191,304

6,878,740

Operating costs

(6,602,121)

(6,069,201)

Gross profit

1,589,183

809,539

Other operating income

78,853

83,679

Business and administrative expenses

(642,031)

(562,435)

Net impairment losses on financial assets

(15,446)

(4,915)

Other (losses)/gains, net

(18,372)

35,413

Operating profit

5

992,187

361,281

Finance costs

6

(91,312)

(151,599)

Share of profits of joint ventures

3,290

4,116

Share of profits of associated companies

9,509

10,028

Profit before taxation

913,674

223,826

Taxation

7

(10,656)

(69,839)

Profit for the year from continuing operations

903,018

153,987

Discontinued operation:

Profit for the year from discontinued operation

10

-

1,194,806

Profit for the year

903,018

1,348,793

Profit attributable to:

Equity holders of the Company

902,723

1,348,793

Non-controlling interests

295

-

903,018

1,348,793

Earnings per ordinary share (US cents)

8

From continuing operations

144.3

24.6

Fromdiscontinued operation

-

190.9

Basic and diluted

144.3

215.5

Consolidated Statement of Comprehensive Income For the year ended 31st December 2020

US$'000

2020

2019

Profit for the year

903,018

1,348,793

Other comprehensive income/(loss):

Items that will not be subsequently reclassified to profit or loss:

Remeasurement losses on defined benefit schemes

(6,777)

(10,084)

Investments at fair value through other comprehensive income

Change in fair value

(7,800)

(7,925)

Total items that will not be subsequently reclassified to profit or loss

(14,577)

(18,009)

Items that have been reclassified or may be reclassified

subsequently to profit or loss:

Currency translation adjustments

Foreign subsidiaries

9,366

(1,643)

Associated companies

8,862

(2,066)

Joint ventures

495

(15)

Release of reserve upon step acquisition from joint venture

to subsidiary

652

-

Total items that have been reclassified or may be reclassified

subsequently to profit or loss

19,375

(3,724)

Other comprehensive income/(loss) for the year, net of tax

4,798

(21,733)

Total comprehensive income for the year

907,816

1,327,060

Total comprehensive income attributable to:

Equity holders of the Company

907,556

1,327,060

Non-controlling interests

260

-

907,816

1,327,060

Total comprehensive income for the year attributable

to equity holders of the Company arising from:

Continuing operations

907,556

132,254

Discontinued operation

-

1,194,806

907,556

1,327,060

Consolidated Balance Sheet As at 31st December 2020

US$'000

Note

2020

2019

AS S ETS

Non-current assets

Property, plant and equipment

3,744,666

3,162,424

Right-of-use assets

2,303,265

2,830,674

Investment property

280,000

310,000

Investments in joint ventures

9,848

10,163

Investments in associated companies

144,987

137,665

Intangible assets

18,856

30,824

Deferred taxation assets

6,255

5,083

Restricted bank balances

321

56,795

Investments at fair value through other comprehensive income

7,895

15,694

Investments at amortised cost

113,295

147,420

Other non-current assets

21,344

49,371

6,650,732

6,756,113

Current assets

Invent ories

94,778

113,485

Debtors and prepayments

11

681,126

668,268

Investments at amortised cost

34,117

43,886

Portfolio investments at fair value through profit or loss

100,560

152,923

Tax recoverable

8,520

8,121

Restricted bank balances

1,925

3,499

Cash and bank balances

3,072,795

3,455,570

3,993,821

4,445,752

Total assets

10,644,553

11,201,865

EQ UITY

Equity holders

Share capital

62,579

62,579

Reserves

5,579,535

4,864,828

5,642,114

4,927,407

Non-controlling interests

380

-

Total equity

5,642,494

4,927,407

LIAB ILITIES

Non-current liabilities

Borrowings

820,325

1,033,141

Lease liabilities

1,669,163

2,309,083

Deferred taxation liabilities

143,121

150,479

Pension and retirement liabilities

15,447

11,494

Provision

12

348,545

-

2,996,601

3,504,197

Current liabilities

Creditors and accruals

13

1,387,711

1,072,605

Borrowings

213,270

394,996

Lease liabilities

367,085

253,869

Current taxation

37,392

47,522

Dividend payable

-

1,001,269

2,005,458

2,770,261

Total liabilities

5,002,059

6,274,458

Total equity and liabilities

10,644,553

11,201,865

Consolidated Cash Flow Statement For the year ended 31st December 2020

US$'000

2020

2019

Cash flows from operating activities

Cash generated from operations

2,013,606

948,131

Interest and financing charges paid

(75,640)

(170,123)

Income tax paid

(33,232)

(118,404)

Net cash from operating activities

1,904,734

659,604

Cash flows from investing activities

Sale and redemption on maturity of non-current assets

72,817

60,153

Purchase of property, plant and equipment

(369,581)

(181,795)

Purchase of other non-current assets

(9,958)

(29,352)

Decrease in portfolio investments at fair value through profit or loss

46,721

241,609

Acquisition of subsidiaries

9,646

-

Disposal of subsidiaries

-

1,709,248

Deposit paid for investment in an entity

-

(1,678)

Investment in a joint venture

-

(146)

Investment in an associated company

(852)

(2,840)

Net change in amounts due from joint ventures

-

2,183

Increase in restricted bank balances and bank deposits

maturing more than three months

(433,638)

(1,182,172)

Interest received

69,999

61,777

Dividends and distribution received from investments

8,768

9,648

Dividends received from joint ventures and associated companies

17,257

15,716

Net cash (used in)/from investing activities

(588,821)

702,351

Cash flows from financing activities

Drawdown of loans

99,550

301,310

Repayment of loans

(496,934)

(684,659)

Drawdown of lease liabilities

-

99,145

Repayment of lease liabilities

(603,882)

(352,109)

Dividends paid to equity holders of the Company

(1,198,894)

(89,859)

Capital contribution from non-controlling interests

120

-

Net cash used in financing activities

(2,200,040)

(726,172)

Net (decrease)/increase in cash and cash equivalents

(884,127)

635,783

Cash and cash equivalents at beginning of year

2,272,570

1,584,465

Net change in cash and cash equivalents of disposal group

classified as held for sale

-

53,733

Currency translation adjustments

9,666

(1,411)

Cash and cash equivalents at end of year

1,398,109

2,272,570

Analysis of cash and cash equivalents

Cash and bank balances

3,072,795

3,455,570

Bank deposits maturing more than three months from the date of placement

(1,674,686)

(1,183,000)

Cash and cash equivalents at end of year

1,398,109

2,272,570

Consolidated Statement of Changes in Equity For the year ended 31st December 2020

Equity holders

Non-

Share

controlling

US$'000

capital

Reserves

Sub-total

interests

Total

At 1st January 2019

62,579

4,626,245

4,688,824

-

4,688,824

Total comprehensive income for the year

-

1,327,060

1,327,060

-

1,327,060

Transactions with owners

Employee share-based compensation

-

2,651

2,651

-

2,651

2018 final dividend

-

(48,181)

(48,181)

-

(48,181)

2019 interim dividend

-

(41,678)

(41,678)

-

(41,678)

2019 first special dividend

-

(1,001,269)

(1,001,269)

-

(1,001,269)

At 31st December 2019

62,579

4,864,828

4,927,407

-

4,927,407

Total comprehensive income for the year

-

907,556

907,556

260

907,816

Transactions with owners

Employee share-based compensation

-

4,776

4,776

-

4,776

2019 final dividend

-

(16,834)

(16,834)

-

(16,834)

2019 second special dividend

-

(150,190)

(150,190)

-

(150,190)

2020 interim dividend

-

(30,601)

(30,601)

-

(30,601)

Capital contribution from non-

controlling interests

-

-

-

120

120

At 31st December 2020

62,579

5,579,535

5,642,114

380

5,642,494

NOTES

  • 1. Scope of work of PricewaterhouseCoopers in the preliminary announcement

    The figures in respect of the preliminary announcement of the Group's results for the year ended 31st December 2020 have been agreed by the Group's auditor, PricewaterhouseCoopers, to the amounts set out in the Group's draft consolidated

    financial statements for the year. The work performed by PricewaterhouseCoopers in this respect did not constitute an assurance engagement in accordance with Hong Kong Standards on Auditing, Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the Hong Kong Institute of Certified Public Accountants and consequently no assurance has been expressed by PricewaterhouseCoopers on the preliminary announcement.

  • 2. General information

    The Company is a members' limited liability company incorporated in Bermuda.

    The address of its registered office is Clarendon House, 2 Church Street, Hamilton HM11, Bermuda and the principal office is 31st Floor, Harbour Centre, 25 Harbour Road, Wanchai, Hong Kong.

    The Company has its shares listed on the Main Board of The Stock Exchange of Hong Kong Limited.

    The ultimate parent company of the Group is China COSCO SHIPPING Corporation Limited ("COSCO SHIPPING"), a state-owned enterprise established in the People's Republic of China (the "PRC").

  • 3. Accounting policies and basis of preparation

    The consolidated financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards ("HKFRS"). They have been prepared under

    the historical cost convention, as modified by the revaluation of investment property, investments at fair value through other comprehensive income and portfolio investments at fair value through profit or loss which are carried at fair value.

Accounting policies and basis of preparation (Continued)

The adoption of revised standards

In 2020, the Group adopted the following amendments to existing standards below, which are relevant to its operations.

Amendments to existing standards

HKAS 1 and HKAS 8 (Amendments) HKFRS 3 (Amendment)Definition of Material

Definition of a BusinessThe adoption of the above amendments to existing standards do not have a material impact on the Group.

New standard and amendments to existing standards that are relevant but not yet effective to the Group

Effective for

accounting

periods beginningNew standard and amendments to existing standards

on or after

HKFRS 16

COVID-19 Related Rent

1st June 2020

(Amendment)

Concessions

HKFRS 17

Insurance Contracts

1st January 2021

HKAS 16

Property, Plant and Equipment -

1st January 2022

(Amendment)

Proceeds before Intended Use

HKAS 37

Onerous Contracts - Cost of

1st January 2022

(Amendment)

Fulfilling a Contract

HKAS 1

Presentation of Financial

1st January 2023

(Amendment)

Statements

HKFRS 10 and

Sale or Contribution of Assets

To be announced

HKAS 28

between an Investor and its

(Amendments)

Associate or Joint Venture

The adoption of HKFRS 16 (Amendment), HKFRS 17, HKAS 16 (Amendment),

HKAS 37 (Amendment), HKAS 1 (Amendment) and HKFRS 10 and HKAS 28 (Amendments) are not expected to have a significant effect on the consolidated financial statements of the Group.

Revenue and segment information

(a) Revenue

US$'000

2020

2019

Container transport and logistics

8,164,201

6,851,974

Others

27,103

26,766

8,191,304

6,878,740

The principal activities of the Group are container transport and logistics.

Revenue comprises gross freight, charter hire, service and other income from the operation of the container transport and logistics and rental income from the investment property.

(b) Segment information Operating segments

The segment results for the year ended 31st December 2020 are as follows:

Continuing operations Container transport

US$'000

and logistics Others Total

Revenue from contracts with customers:

Over time

8,164,201

-

8,164,201

Revenue from other source:

Rental income

-

27,103

27,103

8,164,201

27,103

8,191,304

Other operating income

45,224

33,629

78,853

8,209,425

60,732

8,270,157

Operating profit/(loss)

992,628

(441)

992,187

Finance costs (note 6)

(91,312)

-

(91,312)

Share of profits of joint ventures

3,290

-

3,290

Share of profits of associated companies

9,509

-

9,509

Profit/(loss) before taxation

914,115

(441)

913,674

Taxation (note 7)

(21,114)

10,458

(10,656)

Profit for the year

893,001

10,017

903,018

Fair value loss from an investment property

-

(30,492)

(30,492)

Additions to non-current assets#

501,433

493

501,926

Depreciation of property, plant and equipment

235,078

12

235,090

Depreciation of right-of-use assets

195,599

-

195,599

Amortisation

21,497

-

21,497

4.

Revenue and segment information (Continued)

(b) Segment information (Continued) Operating segments (Continued)

The segment results for the year ended 31st December 2019 are as follows:

Continuing operations

Container

US$'000

Revenue from contracts

with customers:

At a point in time

517,328

-

Over time

6,334,646

-

6,851,974

-

Revenue from other source:

Rental income

-

26,766

6,851,974

26,766

Other operating income

25,978

57,701

6,877,952

84,467

Operating profit

279,281

82,000

Finance costs (note 6)

(151,599)

-

Share of profits of joint ventures

4,116

-

Share of profits of associated companies

10,028

-

Profit before taxation

141,826

82,000

Taxation (note 7)

(22,722)

(47,117)

Profit after taxation

119,104

34,883

Profit on disposal of a subsidiary

-

-

Profit for the year

119,104

34,883

Fair value loss from an investment

property

-

(703)

Additions to non-current assets#

369,323

703

Depreciation of property, plant

and equipment

213,477

11

Depreciation of right-of-use assets

195,767

-

Amortisation

20,081

-

transport

Discontinued

and logistics Others

S ub-total

operation*

Total

517,328

-

517,328

6,334,646

111,608

6,446,254

6,851,974

111,608

6,963,582

26,766

-

26,766

6,878,740

111,608

6,990,348

83,679

1,198

84,877

6,962,419

112,806

7,075,225

361,281

76,828

438,109

(151,599)

(35,656)

(187,255)

4,116

-

4,116

10,028

-

10,028

223,826

41,172

264,998

(69,839)

-

(69,839)

153,987

41,172

195,159

-

1,153,634

1,153,634

153,987

1,194,806

1,348,793

(703)

-

(703)

370,026

17,166

387,192

213,488

-

213,488

195,767

-

195,767

20,081

-

20,081

#

Additions to non-current assets comprise additions to property, plant and equipment, right-of-use assets, investment property and intangible assets.

*

The amount of revenue for discontinued operation is presented after eliminating inter-segment revenue of US$184.4 million for the year ended 31st December 2019.

(b) Segment information (Continued) Operating segments (Continued)

The segment assets and liabilities at 31st December 2020 and 2019 are as follows:

2020

Container

transport

US$'000

and logistics

Others

Group

Segment assets

8,922,942

1,566,571

10,489,513

Joint ventures

10,053

-

10,053

Associated companies

144,987

-

144,987

Total assets

9,077,982

1,566,571

10,644,553

Segment liabilities

(4,856,120)

(145,939)

(5,002,059)

2019

Container

transport

US$'000

and logistics

Others

Group

Segment assets

9,478,546

1,574,690

11,053,236

Joint ventures

10,964

-

10,964

Associated companies

137,665

-

137,665

Total assets

9,627,175

1,574,690

11,201,865

Segment liabilities

(5,115,615)

(1,158,843)

(6,274,458)

The segment of "Others" primarily includes assets and liabilities of property investment and corporate level activities. Assets under the segment of "Others" consist primarily of investment property, investments at fair value through other comprehensive income, investments at amortised cost and portfolio investments at fair value through profit or loss together with cash and bank balances that are managed at the corporate level. Liabilities under the segment of "Others" primarily include creditors and accruals and deferred taxation liabilities related to investment property and corporate level activities.

(b) Segment information (Continued) Geographical information

The Group's two reportable operating segments operate in four main geographical areas, even though they are managed on a worldwide basis. Freight revenues from container transport and logistics are analysed based on the outbound cargoes of each geographical territory.

The Group's total assets mainly include container vessels and containers which are primarily utilised across geographical markets for shipment of cargoes throughout the world. Accordingly, non-current assets by geographical areas are not presented.

Additions to non-current

US$'000

Revenue

assets#

Year ended 31st December 2020

Continuing operations

Asia

6,041,641

57,293

Europe

1,213,372

2,372

North America

752,992

1,511

Australia

183,299

50

Unallocated*

-

440,700

8,191,304

501,926

Year ended 31st December 2019

Continuing operations

Asia

4,955,430

77,244

Europe

1,043,705

2,335

North America

714,983

10,427

Australia

164,622

142

Unallocated*

-

279,878

6,878,740

370,026

Discontinued operation

North America

111,608

17,166

6,990,348

387,192

#

Additions to non-current assets comprise additions to property, plant and equipment, right-of-use assets, investment property and intangible assets.

*

Unallocated additions to non-current assets comprise additions to container vessels and capitalised dry-docking costs, containers and computer software costs.

Operating profit

US$'000

Operating profit is arrived at after crediting:

Operating lease rental income

Land and buildings

and after charging:

Depreciation of property, plant and equipment

Depreciation of right-of-use assets Expenses relating to short-term leases and leases with low-value assets

Vessels and equipment Terminals and berths Land and buildings

Direct operating expenses from property that generated rental income Amortisation of intangible assets Auditors' remuneration

2020 Continuing operations

27,103

235,090 195,599

321,153 - 3,737

16,707 21,497

Audit

Non-audit

2,791 1,436

2019 Continuing Discontinued operations operation

26,766

213,488 195,767

226,548 545 6,293 15,573 20,081

2,671 1,863

-

- -

- 3,404 5 - - - 32

6.

US$'000

2020

2019

Interest expense

Bank loans and bank overdrafts

24,507

58,434

Lease liabilities

67,874

93,165

92,381

151,599

Amount capitalised under assets under construction

(1,069)

-

Net interest expense

91,312

151,599

7.

Taxation

US$'000

2020

2019

Current taxation

PRC enterprise income tax

7,815

3,019

Hong Kong profits tax

(1,980)

7,660

Overseas taxation

13,208

19,328

19,043

30,007

Deferred taxation

PRC enterprise income tax

(1,693)

(352)

Hong Kong profits tax

(200)

(32)

Overseas taxation

(6,494)

40,216

(8,387)

39,832

10,656

69,839

8.

Finance costs

Taxation has been provided at the appropriate tax rates prevailing in the countries in which the Group operates on the estimated assessable profits for the year. These rates range from 5% to 35% (2019: 5% to 46%) and the rate applicable for Hong Kong profits tax is 16.5% (2019: 16.5%).

Earnings per ordinary share

The calculation of basic and diluted earnings per ordinary share is based on the Group's profit attributable to equity holders of the Company divided by the number

of ordinary shares in issue during the year.

  • 8. Earnings per ordinary share (Continued)

    The basic and diluted earnings per ordinary share are the same since there are no potential dilutive shares.

    2020

    2019

    Number of ordinary shares in issue (thousands) 625,793

    Group's profit from continuing operations attributable

    to equity holders of the Company (US$'000) 902,723

    Earnings per share from continuing operations attributable

    to equity holders of the Company (US cents)

    Group's profit from discontinued operation attributable to equity holders of the Company (US$'000)

    Earnings per share from discontinued operation attributable to equity holders of the Company (US cents)

  • 9. Dividends

    US$'000

    Interim paid of US4.89 cents (2019: US6.66 cents)

per ordinary share

Special paid of nil (2019: US160.0 cents)

per ordinary share

Proposed final of US50.26 cents (2019: US2.69 cents)

per ordinary share

Proposed special of US86.6 cents (2019: US24.0 cents)

per ordinary share

625,793

153,987

24.6

1,194,806

190.9

2020

2019

30,601

41,678

-

1,001,269

320,253

16,834

551,809

150,190

902,663

1,209,971

144.3

-

-

The Board of Directors proposes a final dividend in respect of 2020 of US50.26 cents (2019: US2.69 cents) per ordinary share. In addition, the Board of Directors proposes a special dividend of US86.6 cents (2019: US24.0 cents) per ordinary share. The proposed dividends will be accounted for as an appropriation of retained profit in the year ending 31st December 2021.

10. Discontinued operation

On 29th April 2019, the Group entered into the Sale and Purchase Agreement with Olivia Holdings, LLC relating to the sale and purchase of the entire interests in LBCT LLC, a wholly owned subsidiary of the Company which operates Long Beach Container Terminal ("LBCT"), for a consideration of US$1,780.0 million (subject to certain post-completion adjustments). The sale was completed on 24th October 2019.

Analysis of the results and cash flows of the discontinued operation for the year ended 31st December 2019 is as follows:

(a)

Results

US$'000

2019

Revenue

111,608

Operating costs

(12,048)

Gross profit

99,560

Other operating income

1,198

Business and administrative expenses

(24,109)

Reversal of impairment losses on financial assets

179

Operating profit

76,828

Finance costs

(35,656)

Profit after taxation

41,172

Profit on disposal of a subsidiary

1,153,634

Profit from discontinued operation

1,194,806

Note:

The Directors consider it is more appropriate to reflect only the revenue and the results arising from transactions with third parties under the discontinued operation. The inter-company profits are presented under continuing operations.

(b) Cash flows

US$'000

2019

Operating cash flows

138,719

Investing cash flows

1,751,412

Financing cash flows

(116,848)

Total cash flows

1,773,283

11. Debtors and prepayments

US$'000

2020

2019

Trade receivables

Third parties

446,246

396,007

Joint ventures

205

680

Fellow subsidiaries

6,598

476

Related companies

5,875

-

Less: Provision for impairment

(47,566)

(34,837)

Trade receivables - net

411,358

362,326

Other debtors

105,972

134,034

Other prepayments

132,150

146,037

Utility and other deposits

17,518

14,881

Amounts due from related parties

Joint ventures

-

121

Fellow subsidiaries

13,578

9,460

Related companies

550

1,409

681,126

668,268

Trade receivables are normally due for payment on presentation of invoices or granted with an approved credit period ranging mainly from 10 to 30 days. Debtors with overdue balances are requested to settle all outstanding balances before any further credit is granted.

The ageing analysis of the Group's trade receivables, net of provision for impairment, prepared in accordance with the dates of invoices, is as follows:

US$'000

2020

2019

Below 1 month

319,114

273,727

2 to 3 months

84,194

76,003

4 to 6 months

6,680

8,258

Over 6 months

1,370

4,338

411,358

362,326

There is no concentration of credit risk with respect to trade receivables, as the Group has a large number of internationally dispersed customers. Other debtors are fully performing.

  • 12. Provision

    The Group entered into the Terminal Service Agreement ("TSA") in October 2019 to which the Group committed to place, or procure the placement of an annual minimum number of vessel lifts in LBCT for 20 years. Failure to meet the committed volume for each contract year would require certain level of deficiency payment as stipulated in the TSA.

    As at 31st December 2020, the Group reassessed the expected number of vessel lifts in LBCT for each of the remaining contract years with reference to future prospects of the market and its expected load factor. Considering the prolonged COVID-19 pandemic in the USA and the uncertain vaccine efficacy, recovery of the USA economy has been and was expected to be continuously affected for the foreseeable future. It was expected that a slower economy growth would affect the demand/import of the USA for some time as it shall take years to recover from various pandemic impact. With these uncertainties over such long-term period, management reassessed that the projected vessel lifts in LBCT would grow at a smaller and slower extent compared with prior year's assessment and thus led to a shortfall on minimum volume commitment over the remaining contract period. The Group estimated an onerous contract provision of US$348.5 million (2019: nil).

  • 13. Creditors and accruals

US$'000

2020

2019

Trade payables

Third parties

213,626

202,306

Joint ventures

3,467

4,175

Fellow subsidiaries

92,410

19,223

Related companies

9,724

13,979

319,227

239,683

Other creditors

144,343

168,643

Accrued expenses

894,288

612,662

Contract liabilities and deferred revenue*

14,253

50,966

Amounts due to related parties

Joint ventures

651

651

Fellow subsidiaries

13,489

-

Related companies

1,460

-

1,387,711

1,072,605

*As permitted by HKFRS 15, the transaction price for contracts with an original expected duration of one year or less is exempt from disclosure due to practical expedient.

13. Creditors and accruals (Continued)

The ageing analysis of the Group's trade payables, prepared in accordance with the dates of invoices, is as follows:

US$'000

2020

2019

Below 1 month

257,905

180,956

2 to 3 months

55,148

49,498

4 to 6 months

2,726

2,707

Over 6 months

3,448

6,522

319,227

239,683

14. Event subsequent to year end

On 22nd January 2021, the Company entered into a share placing and subscription agreement for the allotment and issue of 11,400,000 shares at a subscription price of

HK$81.8 per share. The share subscription was completed on 29th January 2021.

Results for 2020

OOIL ANNUAL RESULTS ANALYSIS

2020

2019

Container Transport and Logistics

914,115

141,826

Other Activities

(441)

82,000

Profit Before Tax for the Year Ended 31st December

913,674

223,826

Taxation

(10,656)

(69,839)

Profit from Continuing Operations

903,018

153,987

Profit from Discontinued Operation (Excluding Profit on

Disposal of LBCT)

-

41,172

Profit from Operations

903,018

195,159

Profit on Disposal of LBCT

-

1,153,634

Non-Controlling Interests

(295)

-

Profit Attributable to Equity Holders

902,723

1,348,793

Review of Operations

(US$'000)

Profit/(loss) before tax by activity:

The Group recorded 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 LBCT of US$1,153.6 million).

Our impressive result for 2020, which includes the highest ever revenue, liftings and profit figures for our core container shipping and logistics business, was achieved in an unprecedented and extremely complicated context. We began 2020 with a relatively optimistic outlook, noting the first stage trade agreement between China and the United States, and the improving trend in the supply and demand balance in our sector.

However, very soon, the global consequences of the outbreak of COVID-19 began to be felt. Following the initial spread of the virus across the world, market and customer forecasts suggested massive reductions in demand. While demand certainly did fall, it did not fall as dramatically or for as long as had been anticipated.

Since June, the situation for container shipping has been improving. Benefitting from effective epidemic prevention measures, China was among the first countries to re-activate production and re-open for business. In economies such as the United States and Europe by a combination of measures, including the encouragement of working from home and governmental subsidies, consumer demand also began to improve. In turn, demand for space on our various tradelanes increased dramatically, with efforts being made to put more capacity into service as quickly as possible, in order to meet the surprising levels of demand.

This relatively prompt restart, coupled with the beginning of a wave of unexpectedly strong demand that continued unabated throughout the year, led to more capacity being deployed on some routes in the Trans-Pacific Peak Season 2020 than during the same period in 2019.

Our teams had to manage not only sudden and severe swings in demand, but also tremendous operational challenges. Lockdowns in different terminals and at different points in the supply chain created chokepoints at key hubs. The industry faced additional difficulties with a shortage of workers due to social distancing measures. As more and more services were introduced, congestion and equipment availability became more and more problematic. All these elements went together to create operational delays, and a slowdown in the flow of the repositioning of container boxes, which then in turn created further obstacles.

We continued to benefit from increased co-operation and synergy within COSCO SHIPPING Holdings, which helped us to handle the challenges of the year in the most professional and efficient manner. In this Dual Brand context, and despite the impact of the pandemic, we expanded our presence into new routes, servicing many emerging markets, not least Latin America, and building up our global coverage further.

We placed orders for twelve 23,000 TEU vessels during 2020, which are scheduled to be delivered during 2023-2024. Not only will these modern, efficient vessels improve our cost structure and our services in the Asia-Europe trade, but they also serve as clear evidence of the entire group's continuing commitment to our very successful dual brand strategy.

For many years now, we have commented on the benefits of alliance membership. Our situation within the Ocean Alliance continues to provide us significant advantage, and ensures that we are able to offer a broad, high-quality service network to our customers. We have been members of the Ocean Alliance for four years, and look forward to attaining further benefit from our continued membership into a fifth year.

The challenges in effecting crew changes were rightly a key focus during 2020, and remain so. Seafarers, through their efforts and sacrifices, have kept world trade flowing during 2020, and we all owe them a special debt of thanks. We will exert every effort to ensure the safety and wellbeing of our seafarers, and this includes going the extra mile to help them return home at the end of each assignment. We believe that we have been among the best performers in this regard, and, having signed the Neptune Declaration, we look forward to encouraging all parties to facilitate crew change, even during these challenging pandemic times.

Our logistics business, OOCL Logistics, in spite of COVID-related challenges earlier in the year, had a fruitful 2020. We strengthened our business in rail services between China and Europe, and our Air Freight Forwarding. Our warehousing and distribution activities increased, and we added new depot and warehousing capacity in Thailand and Vietnam. We believe that co-operation between our logistics business and our liner activities will help to drive our groupwide strategic growth plan for end-to-end services.

Our group continues to advance its longstanding track record as a leader in technology and digital innovation. We launched our Freightsmart platform, which will provide instant quotation and booking. We inaugurated IQAX, a wholly-owned subsidiary, which will play a leading role in driving the digital transformation of the container shipping industry. In the early part of the year our Business Continuity Infrastructure was put to the test, as thousands of employees suddenly had to work from home due to COVID-19 lockdowns - thanks to the solid efforts of all colleagues, we passed this test with flying colours, and maintained business operations and high quality customer service.

Based on an independent valuation as at 31st December 2020, Wall Street Plaza was valued downwards by US$30.0 million, reflecting an assessed market value of US$280.0 million. Taking into consideration of US$0.5 million capital expenditures on the building in 2020, the fair value loss for 2020 has come to US$30.5 million. As at 31st December 2019, Wall Street Plaza was valued at US$310.0 million.

Looking Forward

Looking ahead, despite current strong markets, we must recognise that the full impact of COVID-19 may not be known for some time. By this, we mean not only the inevitable fluctuations of the freight rate markets and of the balance between shipping supply and global demand, but also that it remains to be seen how supply chains will evolve after the challenges of 2020. We seek to serve our customers with ever greater end-to-end services and improved digitalised interfaces. However, it also creates challenges and risks, which we will address intelligently and proactively.

Whatever happens, OOIL will adapt and be ready to serve its customers. We will continue to work tirelessly and diligently to be at the forefront of our industry, in technology, in environmental and social responsibility, in customer service, and in profitability and financial health. As part of the COSCO SHIPPING Group, a true global leader in container shipping and logistics, we have confidence that, under our Dual Brand strategy, we are well placed to drive forward the success of our industry, as a Vital Link to World Trade.

Final and Special Dividends

The Board of Directors of the Company (the "Board") has recommended the payment of a final dividend of US50.26 cents (HK$3.920 at the exchange rate of US$1 : HK$7.8) per ordinary share and a special dividend of US86.6 cents (HK$6.755 at the exchange rate of US$1 : HK$7.8) per ordinary share for the year ended 31st December 2020 to be paid on 29th June 2021 to the shareholders of the Company whose names appear on the register of members of the Company on 1st June 2021. Shareholders should complete the dividend election form (if applicable) and return it to the Company's Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited (the "Branch Share Registrar") at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, not later than 4:30 p.m. on 21st June 2021.

Dividend policy

Shareholders of the same class of shares shall have equal rights to dividends and distributions. The Company adopted a dividend policy (the "Dividend Policy") that balances the objectives of appropriately rewarding the shareholders for their investment and retaining reserves for long-term development and future expansion of the Company, and enhances transparency facilitating shareholders and investors to make informed investment decisions.

The Dividend Policy has a target annual dividend payout of 40% of the consolidated net profit attributed to the shareholders of the Company in the financial years of 2021, 2022 and 2023, and the Company's annual dividend payment shall not be less than US$400 million in 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 Company may also declare special dividends from time to time in addition to the semi-annual dividends.

The declaration of dividends is subject to the sole discretion of the Board. There can be no assurance that dividends will be paid in any particular amount of any given period. The Dividend Policy shall not constitute a legally binding document in respect of future dividend declaration of the Company and/or in no way oblige the Company to declare a dividend at any time or from time to time. The distribution and payment of dividends of the Company will be subject to compliance with the Company's Bye-laws and applicable laws and regulations.

Liquidity and Financial Resources

As at 31st December 2020, the Group had liquid assets amounting to US$3,323.0 million and a total indebtedness of US$3,069.8 million. The Group changed from a net debt to equity ratio of 0.23 : 1 as at end of 2019 to a net cash position at the end of 2020.

The indebtedness of the Group mainly comprises bank loans and lease liabilities which are mainly denominated in US dollar. The Group's borrowings are monitored to ensure a smooth repayment schedule to maturity.

Employee Information

As at 31st December 2020, the Group had 10,552 full-time employees. Their salary and benefit levels are maintained at competitive levels. Employees are rewarded on a performance related basis within the general policy and framework of the Group's salary and bonus schemes which are regularly reviewed. Other benefits including medical insurance and pension funds are also provided, and social and recreational activities are organised around the world.

Closure of Register of Members

The register of members of the Company will be closed during the following periods:

  • (a) from 17th May 2021 to 21st May 2021, both days inclusive, to ascertain the shareholders entitled to attend and vote at the annual general meeting of the Company to be held on 21st May 2021 (the "AGM"). During this period, no transfer of shares will be registered. To be eligible to attend and vote at the AGM, all share transfer documents must be accompanied with the relevant share certificates and lodged with the Branch Share Registrar at Shops 1712-1716, 17th

    Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong for registration not later than 4:30 p.m. on 14th May 2021; and

  • (b) from 28th May 2021 to 1st June 2021, both days inclusive, to ascertain the shareholders entitled to the proposed final and special dividends. During this period, no transfer of shares will be registered. To qualify for the proposed final and special dividends, all share transfer documents must be accompanied with the relevant share certificates and lodged with the Branch Share Registrar at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong for registration not later than 4:30 p.m. on 27th May 2021.

Purchase, Sale or Redemption of Shares

During the year ended 31st December 2020, neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the Company's shares.

Pre-emptive Rights

No pre-emptive rights exist under Bermudan law in relation to the issue of new shares by the Company.

Corporate Governance

Compliance with the Corporate Governance Code

The Board and the management of the Company are committed to maintaining high standards of corporate governance. The Company considers that effective corporate governance makes an important contribution to corporate success and to the enhancement of shareholder value.

The Company has adopted its own corporate governance code (the "CG Code"), which in addition to applying the principles as set out in the Corporate Governance Code and Corporate Governance Report (the "SEHK Code") contained in Appendix 14 to the Rules Governing the Listing of Securities (the "Listing Rules") on The Stock Exchange of Hong Kong Limited (the "HKEX"), also incorporates and conforms to local and international best practices. The CG Code sets out the corporate governance principles applied by the Group and is constantly reviewed to ensure transparency, accountability and independence.

Throughout the year of 2020, the Company complied with the SEHK Code, save for the following:-

  • Mr. Xu Lirong, the Chairman of the Board, did not attend the annual general meeting of the Company held on 15th May 2020 due to prior business engagement and delegated to Mr. Chow Philip Yiu Wah to chair the meeting.

Further information on the CG Code will be set out in the Corporate Governance Report contained in the Company's 2020 Annual Report.

Review of Financial Statements

The Audit Committee has reviewed the annual results of the Group for the year ended 31st December 2020, in conjunction with the external and internal auditors of the Company.

Securities Transactions by Directors

The Company has adopted its own code of conduct regarding securities transactions by Directors (the "Code") on terms no less exacting than the required standard set out in the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") contained in Appendix 10 to the Listing Rules.

All Directors have confirmed, following specific enquiry by the Company, that they had fully complied with the required standards set out in both the Code and the Model Code for the year ended 31st December 2020.

Annual General Meeting

The AGM will be held on 21st May 2021. Notice of the AGM will be despatched to the shareholders of the Company on or around 19th April 2021.

Publication of Results Announcement and Annual Report

This annual results announcement is published on the websites of HKEX at http://www.hkexnews.hk and the Company at http://www.ooilgroup.com.The 2020 Annual Report will be published on the HKEX's website and the Company's website and will be despatched to the shareholders of the Company on or around 29th April 2021.

Directors

As at the date of this announcement, our Executive Directors are Mr. XU Lirong, Mr. HUANG Xiaowen, Mr. YANG Zhijian and Mr. FENG Boming; our Non-Executive Directors are Mr. TUNG Lieh Cheung Andrew, Mr. YAN Jun, Ms. WANG Dan, Mr. IP Sing Chi and Ms. CUI Hongqin; and our Independent Non-Executive Directors are Mr. CHOW Philip Yiu Wah, Dr. CHUNG Shui Ming Timpson, Mr. YANG Liang Yee Philip, Ms. CHEN Ying and Mr. SO Gregory Kam Leung.

Forward Looking Statements

This announcement contains forward looking statements. Statements which are not of historical facts, including statements of the Company's beliefs and expectations, are forward looking statements. They are based upon current plans, estimates and projections and, therefore, no undue reliance should be placed upon them. Forward looking statements are correct only as of the day on which they are made. The Company has no obligation and does not undertake to update any of them publicly in the light of fresh information or of future events. Forward looking statements contain inherent risks, uncertainties and assumptions. The Company warns that should any of these risks or uncertainties ever materialise or that any of the assumptions should prove incorrect or should any number of important factors or events occur or not occur, then the actual results of the Company may differ materially from those either expressed or implied in any of these forward looking statements.

On behalf of the Board

Orient Overseas (International) Limited

XU Lirong

Chairman

Hong Kong, 26th March 2021

* For identification purpose only

Website : http://www.ooilgroup.com

Disclaimer

OOIL - Orient Overseas (International) Limited published this content on 26 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 March 2021 04:30:01 UTC.


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Sales 2021 16 764 M - -
Net income 2021 7 015 M - -
Net cash 2021 3 687 M - -
P/E ratio 2021 2,24x
Yield 2021 36,2%
Capitalization 15 552 M 15 549 M -
EV / Sales 2021 0,71x
EV / Sales 2022 0,52x
Nbr of Employees 10 593
Free-Float -
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Managers and Directors
Xiao Wen Huang Chief Executive Officer & Executive Director
Ming Wen Zhang Chief Financial Officer
Min Wan Chairman
Jun Guang Xiao Secretary & Compliance Officer
Yiu Wah Chow Independent Non-Executive Director