P&O TRADING UPDATE: JANUARY TO MARCH 2004

RNS Number:3995Y
Peninsular & Oriental Steam Nav Co
07 May 2004

EMBARGO: NOT FOR PUBLICATION BEFORE 07.00 HOURS (UK TIME) ON

FRIDAY, 7 MAY 2004

P&O TRADING UPDATE: JANUARY TO MARCH 2004

This is the first quarter update in 2004 for P&O’s ports, ferries and logistics
businesses.

Key Points for Q1

* Organic growth in Ports’ container volumes was 17% up on the previous
year, driven by continuing strength particularly in Asia and Europe.
Record container volumes were handled in P&O terminals in China and India;

* Ferries’ tourist rates improved despite a decline in overall market
volumes. Freight volumes were stable but at reduced rates;

* Cold Logistics made a good start to the year, particularly in the US
and South America; and

* Property disposals are on track to achieve net sales of #250 million by
the end of the year.

The next quarterly update (April to June 2004) is scheduled for 12 August 2004
when the Group expects to announce its interim results.

Further information: Peter Smith, Director, Communications and Strategy
+44 (0)20 7930 4343

Victoria Moth, Corporate Communications Manager
+44 (0)20 7321 4593

Andrew Lincoln, Manager, Investor Relations and Strategy
+44 (0)20 7321 4490

PORTS

Throughput(1) (TEU(2)’000)
Q1
2004 2003

By Region
Asia 1,365 1,077
Americas 501 367
Europe 905 634
ANZ 438 396
Total 3,209 2,474

(1) Throughput is reported on an equity adjusted basis i.e. 100% of volumes
through subsidiaries plus the equity share of associate and joint venture
volumes. Therefore equity adjusted throughput recognises the actual volume
that contributes to P&O Ports’ earnings as reported in its profit and loss
statement.

(2) TEU = twenty foot equivalent unit. This is a standard size of container
and a common measure of capacity in the container logistics business.

Key Points

1. In Q1, throughput was 30% higher than Q1 2003 with 17% attributable to
organic growth. P&O Ports continued to experience strong growth in
container volumes across almost all locations with a number of facilities
in China and India handling record volumes.

Asia

2. In China, the additional four berths at Qingdao were transferred to the
QQCT joint venture on 1 January 2004. The joint venture, in which P&O has
held a 29% interest since 1 November now operates a total of eight berths.
At Shekou, the last berth of the new extension to the SCT II terminal
commenced operations in February 2004. The total capacity at SCT II is
now operational and, as a result, record volumes are being handled. In
April, subject to government approval, the shareholdings in SCT I and SCT
II were aligned to move towards a common ownership structure. P&O now
holds 22% of both SCT I and SCT II (previously 25% of SCT I and 20% of
SCT II).

3. In South Asia, strong growth was achieved across all terminals except
NSICT at Mumbai which is full. Record volumes were handled at QICT
(Pakistan) and SAGT (Sri Lanka) an