Shares in Orient Overseas (International) Ltd dropped as much as 9.2 per cent yesterday morning after the shipping and property firm reported a 'disappointing' first half as underlying net profit fell 38 per cent. Ken Cambie, the company's chief financial officer, forecast further disappointment in the second half because cargo demand was unlikely to keep pace with the arrival of new container ships into the global fleet. As a result, freight rates would remain under pressure. OOIL shares fell to HK$36 in the morning before recovering to close at HK$38.15, down 3.78 per cent on the day. This came after the firm said net profit fell to US$174.97 million between January and June from US$1.28 billion last year, although this included US$1 billion from the sale of its mainland property business. Underlying net profit was down from US$280.27 million in the first six months of last year. Revenue rose 7 per cent to US$2.92 billion from US$2.73 billion. Commenting on the results, Cambie said: 'It has been particularly disappointing as demand levels grew in line with expectations, but the fall in freight rates has been a function of excess capacity and supply coming into the market. It's always disappointing to see freight rates fall when demand grows.' Pointing to the surge in container ship deliveries, British shipbroker Clarksons said the global box ship fleet totalled 183.7 million deadweight tonnes last year but had climbed to 192.7 million dwt in the first seven months of this year. Container ships totalling a further 52.4 million dwt were scheduled to be delivered between now and 2015. OOIL subsidiary Orient Overseas Container Line saw container volumes climb 9.4 per cent to 2.44 million 20-foot equivalent units in the first half from 2.23 million teu a year earlier. By comparison, OOCL's revenue rose 8.5 per cent to US$2.74 billion from US$2.53 billion. Cambie said average revenue per teu slipped 0.9 per cent to US$1,123 mainly because of the decline in freight rates on Asia-Europe trades. The average load factor on all OOCL services fell 6 per cent to 77 per cent. On the outlook for the rest of the year, Cambie said: 'Historically, the second half is better than the first, but this year, 'No'. It will be very hard to see a significant increase in freight rates in the second half. The whole industry is finding it very tough. We don't see the second half being any better than the first.' The spiralling price of oil meant the firm's marine fuel bill rose 36 per cent to US$560 million and now accounted for 22 per cent of total operating costs, compared with 19 per cent a year earlier. Cambie said the company saw 'no relief on the cost side' from surging oil prices. He saw no impact on the firm's trading conditions from Standard & Poor's decision to downgrade the United States' credit rating. 'We don't hold any US treasuries. We don't hold any European sovereign debt in our portfolio. We are not expecting to see any particular impact on [our] financing costs,' he said.