Container shipping company Orient Overseas (International) Ltd (OOIL) reported its first loss in 11 years and warned that an initial recovery in freight rates could be easily undone.
OOIL reported a US$402.29 million loss for last year and gave a downbeat forecast for the shipping industry if capacity was increased in a hasty way amid a rebound in freight prices.
No final dividend was recommended, compared with 6.5 US cents per share in 2008, showing the company wants to create a buffer against uncertainty in the market.
A special dividend, if any, for this year will be finalised at a board meeting in August, following completion of the disposal of HK$17 billion worth of mainland property assets.
Shares in the company yesterday dropped as much as 5.7 per cent before closing at HK$58, down 2.8 per cent.
The rebound in freight rates in the past two quarters has encouraged shipping lines to increase capacity on the Asia-Europe and transpacific routes this year, adding to the concerns about overcapacity.