NOL First Half Net Profit Up

August 7, 2008

Global container shipping, terminals and logistics group Neptune Orient Lines (NOL) reported a net profit for the first half of 2008 (1H08) of $196 million, a rise of 45% over the same period of 2007 (1H07). 1H08 EBIT was $229 million, 30% higher than 1H07.

For the second quarter of 2008 (2Q08), a period marked by deteriorating market conditions and significant cost pressures, the company reported a net profit of $76 million (19% lower than 2Q07) and EBIT of $92 million (down 18% on 2Q07).

Revenues for 1H08 were up 25% to a record $4.64 billion. 2Q08 revenues rose by 24% to $2.24 billion over the same period of 2007.

The NOL Board of Directors has approved an interim tax-exempt (one-tier) dividend of 4 cents per share to be paid on 5 September 2008.

NOL Group President and Chief Executive Officer, Mr Ron Widdows, said: “The Group has reported a positive operational and financial performance for the first half, despite a significantly more challenging business landscape.”

NOL’s core Container Shipping business, APL, saw revenues rise 32% to $3.94 billion for 1H08, and 31% for 2Q08, at $1.92 billion. 2Q08 average revenue per FEU of $3,014 was 14% higher than for 2Q07. This largely reflected higher bunker adjustment factor (BAF) collections. APL carried record volumes of 1.27 million FEU in 1H08. This was 13% more than in 1H07, with volume increases in most major trade lanes. The Container Shipping unit reported EBIT for 1H08 of $168 million, up 60% on 1H07. 2Q08 EBIT of $60 million was 22% lower than for 2Q07.

Deteriorating market conditions and high bunker prices will result in a significantly more challenging operating environment for container shipping lines in the second half of this year compared to the first half.

In the period ahead, NOL will maintain focus on keeping its asset base tight, while continuing to manage costs and productivity. Even as it sharpens its focus on improving efficiency, the Group will continue to invest in new capabilities that will have a positive impact on service delivery globally, with the aim of continuing to perform at the top of the container shipping sector.