NOL REPORTS BEST EVER NET PROFIT FOR 2000: $178 MILLION

NOL REPORTS BEST EVER NET PROFIT FOR 2000: $178 MILLION    Neptune Orient Lines, the Singapore-based transportation and logistics group that owns APL, reported a record net profit of $178 million for the year ending Dec. 31, 2000 on the back of large profit gains mainly from liner shipping and chartering.
   The result compares with a net profit of $94 million in 1999, a year when NOL benefitted from a $66 million of non-recurring profits, including a gain on the sale of APL’s former stacktrain business. Excluding exceptional items, the 2000 profit represents a positive profit swing of about $150 million when compared to 1999.
   Group operating profit — defined as earnings before interest, tax and non-recurring items — increased to $348 million last year, up 75 percent on the $199 million corresponding figure for 1999.
   Group revenue rose by 9 percent, to $4.67 billion, from $4.28 billion, despite the sale of the U.S. stacktrain business.
   “These are the best results we have ever had,” said Flemming R. Jacobs, NOL group president and chief executive officer, “but we’re not stopping here.”
   Jacobs said that better rates and better volumes in the liner and tanker business contributed to the improvement. “But the new organizational structure and our constant focus on cost management and operational excellence across the group are making a sustained and significant impact,” he said.
   The APL Liner business produced an operating profit of $284 million last year, up by 64 percent, on revenues of $3.8 billion, up by 15 percent. Chartering generated an operating profit of $45 million, as compared to a 1999 loss of $5 million, on revenues of $333 million, up by 37 percent. APL Logistics’ operating profit was $37 million, up by 12 percent, on revenues of $479 million, up by 29 percent. Jacobs said that the results showed that the company had regained health, allowing management to build on the now-strong container transportation business and to focus on growth in the logistics business.
   APL Liner accounted for 81 percent of revenues, APL Logistics 10 percent, and NOL’s chartering and enterprise activities 9 percent last year.
   APL Liner’s operating profit of $284 million last year is believed to be one of the highest profits recorded in the container shipping industry.
   APL Liner’s total container lifts increased by 10 percent last year, to 1.37 million 40-foot equivalent units, from 1.24 million in 1999. The company said that volumes last year amounted to 654,000 FEUs in the Americas region, 429,000 FEUs in Asia and 283,000 FEUs in Europe.
   Except for the impact of higher fuel costs, APL Liner reduced its unit costs last year, the company said. APL also improved its service coverage and expanded on the transatlantic and intra-Asia routes.
   NOL said that APL Liner is now resuming capacity growth, a reversal from its policy in recent years. “We have contracted to add about one third of our current vessel capacity over the next two years, taking advantage of good newbuild prices to rejuvenate our fleet and prepare for future needs,” Jacobs said. The majority of the new vessels will be chartered.
   NOL said that APL’s focus on equipment imbalances last year “was particularly successful,” and was also assisted by the improved inbound volumes to Asia. Closer cooperation within the New World Alliance is also providing opportunities for better cost efficiencies to mutual benefit, the company said.
   NOL said that, based on present indications, it expects overall results for its liner business not to be significantly different from last year’s.
   The group expects strong revenue growth at APL Logistics, partly as a result of the recent takeover of GATX Logistics.
   NOL’s chartering business, consisting mainly of the crude oil transportation activity under American Eagle Tankers, the product tankers under Neptank and the bulk carrier business, achieved substantially improved results last year. The outlook for this sector for 2001 is good, the company said.
   Commenting on the year ahead, Jacobs said there was a lot of talk of a slow-down in the U.S. economy and that some analysts were forecasting a tougher time ahead.
   “The U.S. economy is forecast to grow by about two percent,” he said. “For this big economy it still    means continued trade growth, although it will not match that of last year.”
   Jacobs said that, overall, it will be difficult to match a record year, but NOL is now “better positioned.”    Based on the current outlook for the world’s major economies, the group expects that its result this year will not vary significantly.