P&O Nedlloyd capital gain boosts P&O group’s result
A '188 million ($338 million) capital gain on the sale of shares in Royal P&O Nedlloyd to A.P. Moller-Maersk allowed Peninsular & Oriental (P&O) to boost its net profit to '225 million ($403 million) in the first half, from '59 million a year ago.
The London-based group also reported a 19 percent decline in operating profit before exceptional items to '78 million ($140 million), from '97 million in the first half of 2004.
P&O said it received on June 30 '381 million ($685 million) in cash from its sale of a 25-percent stake in Royal P&O Nedlloyd, and continued to sell property assets. The group invested about '65 million ($117 million) in its port business in the first half and repaid about '521 million ($936 million) of debts.
“We have continued to expand our ports business worldwide, most notably with the conditional approval for our London Gateway project,” said Robert Woods, chief executive of P&O.
“We sold our remaining shareholding in Royal P&O Nedlloyd at a significant profit, we have achieved substantial property disposals and the fundamental business review of ferries is on track to deliver the level of savings anticipated,” he added.
P&O Ports increased its worldwide port traffic 7 percent to 7.1 million TEUs in the first half, with throughput up 10 percent to 1.2 million TEUs in the Americas.
Port revenues rose 15 percent to '548 million ($985 million). P&O’s port business raised its operating profit to '83 million ($149 million), from '75 million a year earlier.
P&O said the underlying profit of its port business in Asia rose 17 percent to '48 million ($86 million) in the first half. In the Americas, underlying profit was flat at '10 million ($17 million). The group cited competitive market conditions in Argentina and improved results in the port of Newark
P&O’s European ferries business narrowed its loss to '17 million ($31 million), from '20 million in the first half of 2004, while the group’s property activities reported a lower operating profit.
“Our container terminals in Asia are experiencing good growth although this has been offset by slower growth in the U.K. and Australia,” P&O said. For the full year, it expects organic volume growth of about 7-8 percent.
After the sale of P&O Nedlloyd and property activities, 62 percent of P&O’s assets are invested in ports — its most profitable business. This compared with a proportion of 38 percent in June last year.