Svenska Orient Line Announces Good Results

Wednesday, August 15, 2001
Increased international trade and higher demands on more efficient transportation are two factors that benefit shipping and a niche-oriented shipping company such as Swedish Orient Line (SOL).

SOL's core business is liner shipping between the Nordic countries and the Mediterranean. Since October 1, 2000, this service has been operated via a joint venture, SolNiver Lines, with SOL holding 60% of the shares. This service is based on four RoRo vessels, which are chartered from SOL and supplemented by chartered tonnage when the need arises. In addition to being the general agent for SolNiver Lines in Scandinavia, the Baltic States and the U.K., SOL is also the agent for Pol-Levant Shipping Lines, which also operates liner traffic between the Nordic countries and the Mediterranean. SolNiver Lines has a traffic collaboration agreement with Pol-Levant Shipping Lines.

SOL also operates a container service between the Nordic countries and southern Africa and carries out liner agencies operations for traffic to and from West Africa as well as international project assignments.

With 90 years of experience and close cooperation with its customers, SOL has professional know-how in shipping, which also represents a potential for continued development.

The consolidated result continued to improve during the second quarter with a profit of MSEK 7 (-14). This improvement was mainly accounted for by the liner service between the Nordic countries and the Mediterranean and is a consequence of the restructuring of the business operations.

The profit for the first half of the year was thus MSEK 6, which is a MSEK 35 improvement over the result for the same period in 2000, excluding surplus funds received from Alecta.

Cargo volumes in the liner service to and from the Mediterranean continued to increase during the second quarter. Together with higher freight rates and a higher SEK/USD exchange rate, this means that shipping sales, in comparable terms, were 35% higher than during the equivalent period, last year. However, only a portion of this increase can be seen in the consolidated income statement since SolNiver Lines is consolidated proportionally and the revenues for the RoRo vessels are partly in the form of time-charter hire.

Swedish Orient Line's sale and charter-back of the four RoRo vessels, which took place at the end of last year, have resulted in lower overall costs for the vessels. Another consequence of this is that all the vessel costs are now shown as an operating cost, which means that consolidated depreciation has decreased sharply at the same time as a positive net financial result has arisen due to the fact that all the ship loans were repaid during the last quarter of 2000.

The container service between the Nordic countries and South Africa and the international project assignments also recorded sharply increased cargo volumes together with substantially higher profits.

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