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NOL reports 64% drop in profits

Singapore: Neptune Orient Lines (NOL) has reported a 64% decrease to net profits in the first quarter of 2007 to $43m, despite a 1% increase in year-on-year revenues to $1.9bn. The company's total core earnings before interest and tax (EBIT) amounted to $58m - 59% lower than the year before. The decrease was primarily due to unfavourable market conditions for the group's liner business, which reported a 67% decline in in core EBIT to $41m.

NOL Group president and ceo Dr Thomas Held (pictured), said: "Freight rate levels for our company in the first quarter of 2007 were, on average, 6% lower than in first quarter 2006. This reduction in rate levels year-on-year has been the major factor in the lower profit reported today. The effect of recent freight rate increases achieved in some key trade lanes have yet to be fully reflected in these results."

"Demand for our premium liner services strengthened in the first quarter. Overall volumes in our core liner shipping business grew by 10% over the prior year, reflecting continuing strong demand across all trade lanes," he added.

The group's logistics subsidiary APL did comparatively better, reporting a 25% decrease in its core EBIT to $12m. Although international service revenues saw a 10% increase, contract logistics revenues declined 12% year-on-year, which the company claims reflects "some customer turnover and the exiting of certain contracts with a view to improving margins".  [14/05/07]

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