NOL Profit Soars 44%

Tuesday, February 12, 2008
Neptune Orient Lines (NOL) reported a net profit for 2007 of $523 million, 44% higher than the result for 2006. The Group’s EBIT was $613 million, 53% higher than in 2006. For the fourth quarter of 2007 (4Q07), the company reported a net profit of $196 million (up 292%) and EBIT of $228 million (up 221%).

Revenue for the year was up 12% to a record $8.16 billion. Announcing the results in Singapore, NOL Group President and Chief Executive Officer, Dr Thomas Held, said: “At the start of 2007, we said NOL had a clear, unambiguous intention to grow profitably. We have delivered on that pledge.”

“We have recorded significant growth in container volumes, succeeded in securing higher average unit revenues and adopted a rigorous, disciplined approach to the management of all aspects of our business. Our focus on cost leadership has paid off in a year in which our industry faced very significant pressure on costs, especially fuel.”

“We built excellent momentum in the fourth quarter, with Liner volumes rising 16% quarter-on-quarter and a significantly improved performance in Logistics, coupled with effective cost control across the board.”

In NOL’s Liner business, APL, revenue was up 15% year-on-year at $6.9 billion, and 26% higher for 4Q07, at $2 billion. 4Q07 average revenue per FEU of $2,865 was 11% higher than for the same period in 2006.

For the whole of 2007, APL carried record volumes of 2.4 million FEU (forty-foot equivalent unit). This was 12% more than in 2006, with particularly strong volume increases in the Intra-Asia trade lane. APL’s headhaul utilization in 2007 continued to be at a high average level of 96%.

The Liner unit reported EBIT for 2007 of $533 million, up 56% on 2006, and 4Q07 EBIT of $196 million, 256% higher than for 4Q06.

Dr Held said: “Our business model with its focus on yield, value-added services, high asset utilisation and cost management has again delivered a good financial performance.” NOL’s logistics unit, APL Logistics, recorded a 1% improvement in annual revenue at $1.3 billion, with 4Q07 up 6% at $381 million.

Logistics’ EBIT grew by 14% year-on-year to $57 million, with improved margins and continued cost management contributing to the positive increase. Quarter-on-quarter, EBIT improved by 90% to $19 million, with the EBIT margin for 4Q07 at 5%.

Dr Held said: “APL Logistics’ EBIT margins rank favorably in the logistics industry. Over the past year, we have made good progress in realigning our business model for logistics and focusing on our proven service strengths such as consolidation, deconsolidation and warehouse management.”

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