One of the world's largest container shipping companies, Orient Overseas International Limited, posted impressive first-half profits on Monday.
The company's reported figures served as a clear sign that it had managed to properly navigate the currently ongoing trade dispute between China and the United States.
The Hong Kong-based shipping giant reported an interim net profit of $138.9 million for the first half of 2019. This was a significant shift from its $10.3 million loss over the same period last year. Orient Overseas also reported overall revenues of $3.3 billion for the same period, an impressive 6 percent increase from last year.
The company's output this year has managed to surprise analysts, who were expecting lower numbers due to the disruptions caused by the ongoing trade war. The trade dispute has negatively affected trans-pacific trade and industry since February of last year when US President Donald Trump first issued tariffs on Chinese imports.
According to Orient Overseas, its higher profits this year can mostly be attributed to its container shipping and logistics division. Its property division, on the other hand, had reported a slight decline in profits from $61.7 million last year to $53.8 million this year.
Orient Overseas pointed out that its earnings before interest and taxes (EBIT) margin had increased in its shipping business, due to an increased demand for its container shipping services. The increase was surprising given the uncertainty that was brought about the current trade war.
Despite the tariffs, the company still saw large shipments of low-value items. These items include some furniture items and lighting products. According to the company's deputy chief financial officer, Chinese companies still continued to ship these low-value necessities despite the tariffs as most people will still purchase them despite the higher prices.
Orient Overseas is currently expecting a large influx of cash when the sale of its Long Beach Container Terminal is completed. The company was forced to sell the container terminal after it reached an agreement with the US Department of Homeland Security and the US Department of Justice. A consortium led by Macquarie Infrastructure Partners has agreed to buy the asset from Orient Overseas for $1.78 billion.
Last year, Orient Overseas was acquired by China Ocean Shipping Company (Cosco) for $6.3 billion. The move was aimed at consolidating some of the major players in the industry. Orient Overseas currently six of the largest container ships in the world, sailing different Asian and European routes.
The combined company officially became the third-largest container shipping firm in the world, controlling nearly 12.6 percent of the global container shipping market. Denmark's Maersk currently ranks as the largest container ship operator in the world, with a 17.9 percent share in the global market.
