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A strong performance from its container-shipping unit APL enabled Singapore-based Neptune Orient Lines to post a 44 percent jump in net income for 2007 to $523 million, up from $364 million in 2006.
NOL's annual core earnings before interest and tax (Core EBIT) jumped 53 percent to $613 million, compared to $401 million in 2006. Revenue for the year increased 12 percent to $8.16 billion from $7.27 billion.
APL led the recovery after NOL's disappointing results of 2006 with Core EBIT in 2007 of $533 million, up 56 percent year over year. APL had a particularly good fourth quarter with Core EBIT soaring 256 percent to $196 million. Liner revenue for the year improved 15 percent to $6.9 billion.
The box carrier transported an extra 12 percent containers in 2007 reaching 2.36 million 40-foot equivalent units, compared to 2.1 million FEUs in 2006.
APL's largest regional growth was seen in the Asia/Middle East trade, which increased 17 percent to 784,000 FEUs. Transpacific volume gained 14 percent to 832,000 FEUs, while Latin America traffic rose 10 percent to 182,000 FEUs. APL's transatlantic volume also increased 10 percent to 132,000 FEUs, while Asia/Europe gained the least of all regions with growth of 3 percent to 428,000 FEUs.
APL's head-haul utilization for all trades reached an average level of 96 percent. Average revenue increased 4 percent to $2,740 per FEU. On a regional basis this broke down as:
Americas (transpacific and Latin America): $3,347 per FEU, down 2 percent.
Europe (Asia/Europe and transatlantic): $2,848 per FEU, up 14 percent.
Asia/Middle East: $1,877 per FEU, up 11 percent.
APL Logistics' annual EBIT increased 14 percent year-on-year to $57 million, while sales were up 1 percent to $1.3 billion.
At the start of 2007, we said NOL had a clear, unambiguous intention to grow profitably. We have delivered on that pledge, said Thomas Held, NOL Group president and chief executive officer. He have recorded significant growth in container volumes, succeeded in securing higher average unit revenues and adopted a rigorous, disciplined approach to the management of all aspects of our business. Our focus on cost leadership has paid off in a year in which our industry faced very significant pressure on costs, especially fuel. Looking forwards, NOL said that U.S. container trades would moderate due to recent volatility in world financial markets and a slowing national economy. In other markets, the company expects continuing growth, particularly in trade lanes linked with Asian economies.
From this year, NOL will establish and report the results of a new container terminals business unit called APL Terminals. Had the terminals unit been operating as a separate business last year it would have generated revenue of $609 million based on NOL's pro forma accounts, up 5 percent from 2006. EBIT would have been 9 percent higher at $93 million. As a consequence, NOL's container shipping revenue would have been $6.65 billion (up 16 percent), while EBIT would have been $446 million (up 72 percent).
APL Terminals operates facilities at Los Angeles, Seattle, Oakland and Dutch Harbor in the United States. Its Asian terminals are at Kaohsiung, Yokohama and Kobe. In addition, APL Terminals has investments in facilities at Ho Chi Minh City, Vietnam and Laem Chabang, Thailand.
Steve Schollaert, who has been with NOL for 18 years, has been named CEO of APL Terminals.
NOL's majority shareholder is the Singapore government-controlled investment company Temasek Holdings, which also has a large interest in global container terminal operator PSA International.
Source:American Shipper
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