NOL profit near doubles on slashed costs

Singapore shipper Neptune Orient Lines (NOL)'s 2007 net profit nearly doubled, as its strategy of strict downward pressure in the face of rising fuel costs pay off.

NOL said net profits for 2007 reached US$523 million, 44% higher than in 2006.

Net profits hit US$196 million in the fourth quarter of 2007, up an impressive 292%. Revenue for the year was up 12% to a record US$8.16 billion. 

"We 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," said Dr Thomas Held, NOL group president and CEO. "Our focus on cost leadership has paid off in a year in which our industry faced very significant pressure on costs, especially fuel."

Revenue at NOL's Liner business, APL, was up 15% on-year to reach US$6.9 billion, the company added. APL logged record volumes of 2.4 million FEU (forty-foot equivalent unit) for the whole of 2007, 12% more than in 2006, with particularly strong volume increases in the Intra-Asia trade lane. 

Its logistics unit, APL Logistics logged a 1% improvement in annual revenue at US$1.3 billion, while 4Q07 revenues went up 6% to hit US$381 million. 

Taking into account recent market volatility and a slowing US economy, the company believes growth in the US container trades to moderate. However, it expects a continued growth in container shipping, especially in trade lanes linked with Asian economies.