In what is likely to be his final annual report comments as chairman of Hong Kong’s Orient Overseas Container Line (OOCL) CC Tung, a veteran of the box trades, has predicted a gradual recovery, but no boom for the container sector.
OOCL, which is in the process of being sold to Cosco for $6.3bn, registered a net profit last year of $138m, a noticeable turnaround from 2016’s $219m net loss.
Tung, 74, commented: “The economic backdrop for 2017 was more robust than forecasters had expected. Following a decade of low growth, we saw healthier performance in both GDP and trade volumes across most of the world’s major economies. This was a welcome change after the industry’s low point of 2016. This synchronicity of growth, a rare phenomenon in recent memory, may bode well for the sustainability of the recovery.”
However, more ships hitting the water from Asian shipyards would likely mute the economic growth going forward, Tung suggested.
“This combination of better economic growth and continuing (if moderated) growth in supply, along with higher bunker prices, means that for OOIL and our peers, the environment remains merely one of gradual recovery, not the boom that some analysts expected when improved economic data first started to appear,” Tung remarked.
Looking at the “comparatively low” orderbook for 2019 and 2020, Tung said he was hopeful that the industry may start to enjoy greater stability than it has done for many years.
“In the meantime,” he added, “we maintain a positive, if somewhat cautious, stance.”
The Tung family is set to pocket more than $1bn once all the regulatory hurdles for Cosco’s takeover of OOCL have been met, likely this summer.