NOL Profits Are Up Sharply
Shipping and logistics group Neptune Orient Lines (NOL) reported sharply higher interim net profit that met market expectations, helped by higher freight rates and lower interest expenses. Its net profit surged to $48.70 million from $8.43 million on the back of an eight percent increase in turnover to $2.19 billion. Barra Global Estimates has a full year consensus forecast of S$215.6 million ($123.2 million) Janice Chua, analyst at Vickers Ballas, had expected the first half to come in at S$80 million ($45.7 million). Speaking at a news conference, NOL group president and chief executive Flemming Jacobs said the operating results would have been much better compared to the first half of 1999, except for a non-recurring gain a year ago.
High Times Again in Singapore?
Singapore, once revered for its seemingly insurmountable edge in the ship repair and conversion business, has fallen on harder times in recent years. The forces which have slowed the area's break-neck pace of expansion and dominance are not at all unfamiliar to shipbuilders and repairers in the U.S. and Europe: rising land and labor costs, corporate consolidations and a seemingly endless stream of cut-rate competitors. According to recent financial reports from the area, though, it appears that Singapore's two ship repair yards, Keppel Hitachi Zosen Ltd. and SembCorp Marine Ltd., have found the balance to reign supreme once again. The companies were expected to report modest profit growth after almost two years of restructuring and consolidation.
Singapore Yards Back on Track?
Singapore's two ship-repair yards, Keppel Hitachi Zosen Ltd. and SembCorp Marine Ltd., are expected to report modest profit growth after almost two years of restructuring and consolidation. Keppel Hitachi Zosen was expected to turn in profit of about S$33 million for 1999 after a S$65 million loss for the nine months ended December 1998, analysts said. SembCorp Marine, due to release results today (Feb. 14), should post a 10 percent rise in earnings of between S$78 million and S$80 million against 1998 profit of S$71.81 million. Squeezed by rising land and wage costs, Singapore's shipyard industry underwent a consolidation in 1997 and 1998 that saw the city state's main players reduced to two from four.
