Orient Overseas (International) Ltd., owner of Hong Kong’s biggest container line, posted a 63 percent increase in full-year profit that beat analyst estimates as freight rates rose.
Net income climbed to $296.4 million, from $181.6 million a year earlier, the shipping line said in a statement to Hong Kong’s stock exchange today. That compares with the $275.7 million average of 20 analysts’ estimates compiled by Bloomberg. Sales rose 7.4 percent to $6.46 billion.
Shipping lines including A.P. Moeller-Maersk A/S’s container-shipping line, the world’s biggest, have started raising rates to offset higher fuel costs and recover from industrywide losses in 2011 because of a vessel glut. Orient Overseas’s average rate for moving a container increased 2.9 percent last year, after a 6.7 percent drop in 2011.
“Orient Overseas benefited from its bigger exposure to the more stabilized transpacific market,” Lawrence Li, a Shanghai- based analyst at UOB-Kay Hian Holdings Ltd., said before the earnings announcement. “It can also charge clients more by providing premium door-to-door services.”
The Drewry Hong Kong-Los Angeles 40-foot container rate benchmark fell 3.9 percent to $2,436 in the week ending Feb. 27, after holding steady for two straight weeks due to the Lunar New Year, according to Bloomberg Industries. Rates have jumped 37.5 percent from a year earlier.
Orient Overseas handled 5.22 million 20-foot containers last year, 3.7 percent higher than a year earlier. That included 1.25 million boxes in the transpacific market and 885,323 containers on the Asia-Europe route.
The company plans to pay a final dividend of 7.18 cents per share. It didn’t pay final dividend for 2011. The stock rose 0.7 percent to HK$55.90 at the close in Hong Kong trading, before the earnings were released.
The Shanghai Containerized Freight Index, a measure of rates for goods leaving China’s busiest port, rose 20 percent last year.