NEPTUNE ORIENT LINES GROUP WARNS OF WIDER LOSS

NEPTUNE ORIENT LINES GROUP WARNS OF WIDER LOSS    Neptune Orient Lines, the Singapore-based parent company of APL Liner and APL Logistics, issued a profit warning this morning (Tuesday), saying that exceptional charges will “significantly affect” its 2002 results.
   “Our preliminary estimate of the results for the full year 2002, while worse than expected, is unlikely to exceed $335 million,” a spokesman for Neptune Orient Lines said.
   The profit warning follows the departure in early January of Flemming Jacobs, the group’s president and chief executive officer. Neptune Orient Lines has not appointed a successor to Jacobs, yet.
   The Singaporean group said that it has revised its full-year 2002 result estimate because of exceptional charges that could amount to “about $110 million.”
   When the group announced a heavy half-year net deficit of $151 million last September, it said that recovery had begun, and predicted that the second half of 2002 would be better.
   Neptune Orient Lines now says that the result improvement remains correct “at the operating level,” but not after taking exceptional items into account.
   “Exceptional items will significantly affect the overall bottom- line,” said Cheng Wai Keung, chairman of Neptune Orient Lines.
   The exceptional items charged in the end-of-year accounts will include:
   * An impact of $8 million from port disruption last year on the West Coast of the United States;
   * A $14 million additional write-down of goodwill;
   * Restructuring and severance costs of $37 million;
   * A provision of $33 million relating to losses from the sale of
subsidiaries either realized or pending, including write-down of software;
   * And $18 million for diminution of asset values, including vessels.
   The exceptional items have a cash impact of $50 million. However, the group said that it continues to have a positive operating cash flow.
   If Neptune Orient Lines posts a net loss of $335 million for 2002, this will be the group’s largest loss in its history. Following the takeover of APL in 1997, highly-indebted Neptune Orient Lines lost money in 1997, 1998, 2001 and now in 2002, partly offset by lesser profits in 1999-2000.
   In a separate development, the fund manager UBS sold 4.4 million shares in Neptune Orient Lines on Jan. 17, representing 0.4 percent of the capital of the group.
   The impact on the company’s share price caused by the profit warning is not yet known. The warning was issued in the evening in Singapore.