P&O NEDLLOYD’S RESULTS SINK INTO $292-MILLION LOSS

P&O NEDLLOYD’S RESULTS SINK INTO $292-MILLION LOSS    P&O Nedlloyd Container Line suffered a $292-million annual deficit in 2002, the worst since the Anglo-Dutch carrier was founded at the end of 1996.
   The carrier announced its heavy loss only one week after Neptune Orient Lines, the Singapore-base parent company of APL Liner and APL Logistics, reported a record deficit of $330 million for 2002.
   Robert Woods, group managing director of P&O Nedlloyd, described 2002 as “a terrible year,” but added that results for 2003 would significantly improve.
   P&O Nedlloyd saw average revenue per TEU fall by 12 percent last year, to $1,162.
   Despite an increase in volume of 12 percent, to 3.6 million TEUs, revenue for the year fell by 1 percent, to $4.1 billion.
   The operating result before interest, tax and restructuring costs for 2002 was a loss of $234 million, as compared to a profit of $102 million the year before. Operating result before interest and tax but after restructuring costs was a deficit of $234 million, as compared to a profit of $87 million in 2001.
   The pre-tax result for the year was a loss of $292 million, showing a significant adverse swing in profitability when compared to the $31 million pre-tax profit of 2001.
   However, P&O Nedlloyd said that its cash flow remained positive in 2002, and it reduced its net debt by $12 million, to $693 million. The carrier also reported that it has realized annualised savings of $290 million last year.
   For the fourth quarter, P&O Nedlloyd made an operating loss of $49 million before restructuring costs. Its fuel costs for the quarter were $23 million higher than in the fourth quarter of 2001. Costs incurred from the West Coast port shutdown were $7.5 million.
   The carrier noted that rates have now improved in two successive quarters and were 3 percent higher in the latest quarter than in the second quarter of 2002. “Rate increases are continuing to be achieved on the important Europe/Asia trades,” the carrier said.
   Commenting on prospects for 2003, a spokesman said: “Clearly there are uncertainties surrounding the economic outlook but if current trends continue the 2003 result should be significantly improved.”
   P&O Nedlloyd cited the impact of cost-cutting programs and a continuing improvement in revenue rates that point to a better year in 2003, but would not comment on whether it would return to profitability this year. P&O Nedlloyd warned that it will be affected by the negative effect of a weak dollar, high fuel costs and economic uncertainty, but it said that the supply and demand are now balanced in container shipping.
   Woods confirmed that he will step down as group managing director of P&O Nedlloyd at the end of this year. P&O Nedlloyd will conduct a search for a successor to Woods both internally and outside the company.