APL Logistics completes its turnaround
As the season of interim results continued, there was further good news for companies involved in the international movement of goods. Neptune Orient Lines, the Singapore based shipping line and owner of APL Logistics, released its figures for the first six months of the year. Revenues grew by 14% compared with the same period in 2003, rising from US$2,634m to US$3,003m. Operating profits more than doubled from US$150m to US$377m.
Much of the improvement in operating profit came from its core shipping business. The company put this down to strong volume growth, a focus on maximising asset utilisation, and controlling costs. Volumes in the second quarter grew by 19% year-on-year with continued strong demand on Trans-Pacific, Asia-Europe and Intra-Asia trade routes.
The company’s logistics business, APL Logistics, also provided good figures. Revenues grew by 21% to $551m compared with $454m in the same period in 2003. The turnaround in profitability has been significant with operating profit rising from $1m to $8m in same space of time. With almost three quarters of the division’s revenue generated in the US market (due to its earlier acquisition of GATX) this is an indication of the growing strength of the US economy. This is the second quarter in succession in which the contract logistics operations of APL have returned a profit after a long string of losses. This improvement is as a result of terminating unprofitable accounts, the rationalisation of warehousing facilities and increasing labour productivity.
