STOCK MARKET DIGESTS NOL’S RECORD $330 MILLION LOSS

STOCK MARKET DIGESTS NOL’S RECORD $330 MILLION LOSS    The stock price of Neptune Orient Lines on the Singapore stock exchange was stable on Thursday (Feb. 27), at S$0.92, following the announcement the previous evening of the group’s record $330 million net deficit for 2002.
   Neptune Orient Lines, the parent company of APL Liner and APL Logistics, told the stock exchange that, for its fiscal year 2002, it would pay no dividend, as was the case the previous year.
   In a statement to the stock market, the Singapore-based group also warned that a potential war in the Middle East would impact its bunker purchase costs.
   Bunkers represent about 4 to 9 percent of the group’s total operational cost. “Generally we are able to recover from our customers a portion of any price increase,” Neptune Orient Lines said. Every $10-per-metric-ton change in bunker price affects the group’s bottom line by about $11 million annually, it said.
   However, in the event of an Iraq war, Neptune Orient Lines said that it expects bunker prices “to increase sharply for a short period before retreating to a lower level.”
   If bunker price were to increase by an average of $50 per ton for one month, the net extra cost for Neptune Orient Lines after recovering a 50-percent share through bunker adjustment factors will be $5 million, the group said.
   Unaudited accounts filed by Neptune Orient Lines show that it had a positive cashflow from operating activities of $160 million in 2002, despite its record deficit. The group said on Wednesday that it expects to continue to have a positive cashflow.
   However, Neptune Orient Lines’ cash and cash equivalents decreased from $451 million on Jan. 1, 2002 to $335 million on Dec. 31, 2002, while shareholders’ funds decreased by 37 percent, to $556 million.
   On Dec. 31, the highly-geared Singapore-based group had long-term borrowings of $2.55 billion, against shareholders’ funds of $556 million.