P&O NEDLLOYD REPORTS JUMP IN 3RD-QUARTER PROFIT

P&O NEDLLOYD REPORTS JUMP IN 3RD-QUARTER PROFIT    Anglo-Dutch mega-carrier P&O Nedlloyd Container Line reported a pre-tax profit of $60 million for the third quarter, saying that it was the company’s best quarter since the merged carrier started trading in early 1997.
   The result compares with a breakeven pre-tax result in the third quarter of 1999.
   Operating profit in the latest quarter was $75 million, compared to $16 million in the year-earlier quarter, an improvement of $59 million.
   “Volumes, rates and cost savings all showed solid improvements,” P&O Nedlloyd said.
   The carrier moved 786,700 TEUs in the third quarter, 8 percent more than in the same quarter last year. The volume increase resulted mainly from the acquisition of Farrell Lines in July. Average revenue per TEU rose by 5 percent, to $1,385, from $1,317. These volume and unit revenue increases resulted in a jump in total revenues for the company of 14 percent, to $1.1 billion for the third quarter.
   The profit improvement in the third quarter was achieved despite a $35-million increase in fuel costs, compared with the third quarter of 1999.
   After three years of losses, P&O Nedlloyd’s results this year have shown a marked turnaround.
   For the nine months ended Sept. 30, pre-tax profit was $59 million, compared to a deficit of $68 million in the corresponding period of 1999. Operating profit was $105 million, as compared to an operating loss of $24 million. Revenues reached $3 billion for the nine-month period, up from $2.7 billion a year earlier.
   Haddo Meijer, chairman of the executive committee of P&O Nedlloyd, said that the company has a 10-percent return on capital employed “in sight.” Last year, the return was close to zero.
   “The market is continuing to experience a strong upswing,” P&O Nedlloyd commented.
   P&O Nedlloyd said that the supply of new capacity for the industry “is expected to remain broadly in line with demand for at least the next two years although there may as usual be some short term fluctuations on specific trades.”
   The results of P&O Nedlloyd provide more evidence that container shipping lines are set to achieve very large increases in profitability this calendar year.