Liner recovery sees APL’s 2nd quarter operating profits jump 29%

Liner recovery sees APL’s 2nd quarter operating profits jump 29% Singapore-based Neptune Orient Lines said today its container-shipping unit APL experienced a 29 percent rise in second quarter core earnings before interest, tax and non-recurring items (Core EBIT) to $98 million from $76 million a year ago.
   The rebounding container shipping market boosted APL’s second quarter revenue to $1.52 billion, up 13 percent from $1.34 billion in the same quarter 2006. It also helped NOL post a consolidated second quarter net income of $93 million, up 38 percent, on an 11 percent revenue increase to $1.81 billion.
   'Quarter-on-quarter, our net profit has risen significantly, which points to a general improvement in market conditions in the liner shipping sector, and to our strong performance and the continuing success of our business model with its focus on service excellence,' said Thomas Held, NOL group president and chief executive officer.
   APL’s average revenue per FEU for all markets increased 2 percent to $2,651 in the second quarter with total worldwide liftings up 12 percent to 542,000 FEUs. APL’s head-haul utilization improved to an average of 98 percent, compared to 95 percent in the second quarter of 2006.
   APL’s quarterly performance broken down across its three major markets was:
   * Americas (transpacific and Latin America): 226,000 FEUs (up 11 percent) with average revenue per FEU of $3,358 (down 1 percent).
   NOL said of the transpacific market (up 11 percent to 186,000 FEUs): “Continued strong demand resulted in robust volume growth while some of the effects from the rate increase in May contracting is reflected in the average revenue per FEU.”
   * Europe (Asia/Europe and transatlantic): 132,000 FEUs (up 6 percent) with average revenue per FEU of $2,662 (up 9 percent).
   For the Asia/Europe trade (up 5 percent to 101,000 FEUs), NOL said: “Demand remained very strong, with significant freight rate improvement through rate restoration and yield mix programs.”
   Of the weaker transatlantic (up 11 percent to 31,000 FEUs), the carrier said: “Growth in volume tampered by softening freight rate levels due to competitive pressures.”
   * Asia/Middle East: 184,000 FEUs (up 19 percent) with average revenue per FEU of $1,774 (up 6 percent).
   “Robust demand conditions, especially in the short sea trade lanes, continued in” the second quarter, NOL said.
   First half Core EBIT for APL was $145 million, down 28 percent with average revenue per FEU down 2 percent to $2,592. APL’s first half revenue improved 7 percent to $3.08 billion with volume up 11 percent to 1.12 million FEUs.
   APL Logistics’ Core EBIT rose 40 percent to $14 million in the second quarter with revenue up 2 percent to $299 million. For the first half, APL Logistics’ Core EBIT was flat at $26 million with revenue down 2 percent to $624 million.
   'We have made progress with the realignment of the logistics business. This has been driven by new business wins, the launch of new products and a general increase in demand for logistics services in our key market segments,' Held said.
   NOL’s consolidated first half net income was $136 million, down 27 percent from $187 million in the same period last year. Group revenue increased 5 percent to $3.7 billion from $3.5 billion.
   “Over the course of the first half of this year, we have seen more positive market conditions, resulting in robust volume growth and higher freight rates in key trade lanes,” NOL said in its outlook for the remainder of the year. “Barring unforeseen circumstances, we expect this momentum of growth to continue into the second half of the year.”