Upbeat NOL reports 44% jump in profits

By Marcus Hand in Singapore

Asian-related trade lanes are expected to continue growing strongly.
NEPTUNE Orient Lines is positive about the prospects for the liner industry as it reports a 44% jump in profits for 2007.

“Overall we are not so pessimistic ... the start of year was not so bad, it was good,” Thomas Held, president and chief executive of NOL, told a briefing for its 2007 financial results today.

The Singapore liner company reported a net profit of $523m for last year, 44% higher than 2006, with revenues rising 12% in 2007 to $8.1bn.

“We have exceeded expectations of our performance,” said Dr Held.

The improvement in NOL’s financial performance was particularly marked in the fourth quarter of the year. The line reported a net profit of $196m for the final quarter of 2007, nearly four times that for the same period in the previous year.

NOL said that it had seen very strong growth at the beginning of this year.

“So far this year, all markets are very strong. Market volumes are very strong. Utilisation levels are very high. Through the New Year, volumes were exceptionally strong,” said Ron Widdows, chief executive of NOL liner unit APL.

This growth combines with a confidence about the outlook for the Asia-Europe and Intra-Asian trades to lessen the potential impact of a slowdown of the US economy.

“Based on recent volatility in world financial markets and a slowing US economy, we expect growth in the US container trades to moderate,” Dr Held said.

“In other markets, we expect that there will be continuing growth in container shipping, particularly in trade lanes linked with the Asian economies.”

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