Turnaround for P&O Nedlloyd
P&O Nedlloyd Container Line said it had after tax earnings of $18 million on revenue of $1.01 billion in the first three months of the year, compared to a loss of $29 million on revenue of $896 million in the same period in 2000. Operating profit was $31 million in the first quarter versus an operating loss of $14 million in the first quarter of 2000.
“The $31 million operating profit is the best Q1 result since the company began trading in what has been traditionally the weakest quarter of the year,” the company said in a statement.
Both volumes and average revenue per container was up. The company carried 727,400 TEU in the quarter versus 678,200 TEU in the same 2000 period. The 7% increase in throughput was partly due to the company’s acquisition of Farrell Line last July.
Average revenue per TEU rose to $1,389 from $1,321. “Despite the traditional Q1 low season, revenue rates remain similar to Q4” and 5% ahead of the first quarter of 2000, the company noted. Revenue rates were comparable to those in Q4 2000 and 5% ahead of Q1 2000.
P&O Nedlloyd said it benefited from lower fuel costs during the quarter and that progress with a $182 million cost savings program for 2001 “remains on course. Planning is well advanced for further substantial savings designed to yield another $200 million a year by the end of 2003.”
P&O Nedlloyd is a 50-50 joint venture between the U.K company Peninsular and Orient Steam Navigation Co. and the Dutch firm Royal Nedlloyd.
Royal Nedlloyd, which also owns Martinair, has been selling other assets and has proposed the two companies perform a “reverse listing” where P&O will transfer its 50% interest in P&O Nedlloyd to Royal Nedlloyd in exchange for Royal Nedlloyd shares. If such a plan comes to pass, Royal Nedlloyd would cease to exist and the new entity will be known exclusively as P&O Nedlloyd. Simultaneously, P&O Nedlloyd would become a publicly-listed company.
Nedlloyd said discussions about the scheme “has stepped up the past month. The management of Royal Nedlloyd and P&O are in intensive talks. For the sake of promoting the decision process on this issue no further statements will be made at present. Should the reverse listing not go ahead, Nedlloyd prefers a scenario where one of the joint venture partners will buy out the other one.”
