Shares in Orient Overseas (International) fell almost 4 per cent yesterday after the Tung family shipping and property group reported a 33 per cent drop in net profit to US$116.77 million in the first half of this year. The figure, which included US$42.6 million in dividends from the Hui Xian real estate investment trust, compares with a net profit of US$174.97 million in the first six months of last year even as revenue climbed 7 per cent to US$3.12 billion. The firm, parent of Orient Overseas Container Line, saw its share price drop 3.8 per cent to HK$42.15 in afternoon trade before recovering to HK$42.60, closing down 2.85 per cent on the day. Analysts were surprised by the drop in the share price, pointing out that the result, which included a US$43.1 million profit from OOCL and OOCL Logistics, was 'good' given the current weakness in shipping. Janet Lewis, shipping analyst at Macquarie Capital, said OOCL was likely to be the only global container shipping line that would be profitable in the first half, with the possible exception of Maersk Line. She was 'personally surprised' by the share drop, but added: 'There aren't a lot of buyers out there of shipping equities.' Jon Windham, Asian marine analyst with Barclays Bank, called the profit a 'good result'. He said: 'Given the very weak profitability announced in the first quarter of 2012 by peers, we view the first-half profit as quite positive.' Peak profitability was expected in the third quarter. Ken Cambie, OOIL chief financial officer, said the firm would pay a first-half dividend of 4.66 US cents a share that would cost it US$29.16 million. Turning to the outlook, Cambie said: 'The prospects of a strong third quarter have dimmed a little of late' because of the poor economic situation in Europe and the US. He said container rates, which averaged US$1,112 per teu (20-foot equivalent unit) in the first half, softened in July and August in the run-up to the pre-Christmas peak season although it was a 'relatively mild decline'. By comparison, 'September and the fourth quarter are difficult to call'. Cambie said many mega-containerships, including vessels of more than 10,000 teu, had yet to be delivered this year. This increase in capacity was likely to coincide with the seasonally weaker fourth quarter. 'If there is excess capacity, we could see significant pressure on freight rates in the fourth quarter.' Asked when stability and equilibrium could return, he said: 'There is still a significant order book with 2.4 million teu of vessels to deliver in the next 18 to 24 months. We need to see large mega-ships absorbed into the industry and growth in demand to absorb capacity ... Supply and demand [will take time] to balance.' He confirmed OOCL would boost its own container shipping capacity with the delivery of eight 13,200 teu and four 8,888 teu containerships next year, followed by two 13,000 teu and two 8,888 teu vessels in 2014. Up to four of the 13,200 teu ships have been chartered to Japanese shipping line Nippon Yusen Kaisha. OOCL also splashed out US$192.9 million yesterday on two orders with Shanghai Zhenhua Heavy Industries for eight ship-to-shore and 38 stacking cranes for use at its new Middle Harbour terminal development in Long Beach, California.