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NOL declares 44% profit hike but wary of US slowdown

NOL declares 44% profit hike but wary of US slowdown

Singapore: Container shipping and logistics group Neptune Orient Lines (NOL) today announced a 44% increase in net profit to $523m for 2007 - on the heels of an extremely strong fourth quarter. NOL Group President and Chief Executive Officer, Dr Thomas Held (pictured) said, "We built excellent momentum in the fourth quarter, with Liner volumes rising 16% quarter-on-quarter and a significantly improved performance in Logistics, coupled with effective cost control across the board. Our focus on cost leadership has paid off in a year in which our industry faced very significant pressure on costs, especially fuel."

The company, which is rumored to be in merger negotiations with Hapag Lloyd reported a net profit of $196m (up by 292% on the same last three months of the year in 2006) and pre-tax earnings of $228m (up 221%). Accordingly NOL's total revenue for the year was up 12% to a record $8.16bn.

However, Held anticipates problems in the immediate future. '"Based on recent volatility in world financial markets and a slowing US economy, we expect growth in the US container trades to moderate," he says adding, "In other markets, we expect that there will be continuing growth in container shipping, particularly in trade lanes linked with the Asian economies."

Although he refused to comment on the Hapag Lloyd rumors Held conceded that NOL is actively looking at merger and acquisition potentials.

The group's liner business, APL saw record volumes of 2.4m FEU in 2007, up 12%, primarily due to strong increases in the Intra-Asia trade lane. The division declared a 15% increase in year-on-year revenue to $6.9bn, while NOL's logistics unit, APL Logistics, recorded a 1% improvement in annual revenue at $1.3bn.  [12/02/08]