Global container shipping and logistics group Neptune Orient Lines (NOL) reported a net profit for 2007 of US$523 million, 44% higher than the result for 2006.
The Group’s EBIT was US$613 million, 53% higher than in 2006.
For the fourth quarter of 2007 (4Q07), the company reported a net profit of US$196 million (up 292%) and EBIT of US$228 million (up 221%).
Revenue for the year was up 12% to a record US$8.16 billion.
Announcing the results in Singapore, NOL Group President and Chief Executive Officer, Dr Thomas Held, said: “At the start of 2007, we said NOL had a clear, unambiguous intention to grow profitably. We have delivered on that pledge.”
“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. Our focus on cost leadership has paid off in a year in which our industry faced very significant pressure on costs, especially fuel.”
“We built excellent momentum in the fourth quarter, with Liner volumes rising 16% quarter-on-quarter and a significantly improved performance in Logistics, coupled with effective cost control across the board.”
In NOL’s Liner business, APL, revenue was up 15% year-on-year at US$6.9 billion, and 26% higher for 4Q07, at US$2 billion. 4Q07 average revenue per FEU of US$2,865 was 11% higher than for the same period in 2006.
For the whole of 2007, APL carried record volumes of 2.4 million FEU (forty-foot equivalent unit). This was 12% more than in 2006, with particularly strong volume increases in the Intra-Asia trade lane.
APL’s headhaul utilisation in 2007 continued to be at a high average level of 96%.
The Liner unit reported EBIT for 2007 of US$533 million, up 56% on 2006, and 4Q07 EBIT of US$196 million, 256% higher than for 4Q06.
Dr Held said: “Our business model with its focus on yield, value-added services, high asset utilisation and cost management has again delivered a good financial performance.”
NOL’s logistics unit, APL Logistics, recorded a 1% improvement in annual revenue at US$1.3 billion, with 4Q07 up 6% at US$381 million.
Logistics’ EBIT grew by 14% year-on-year to US$57 million, with improved margins and continued cost management contributing to the positive increase. Quarter-on-quarter, EBIT improved by 90% to US$19 million, with the EBIT margin for 4Q07 at 5%.
Dr Held said: “APL Logistics’ EBIT margins rank favourably in the logistics industry. Over the past year, we have made good progress in realigning our business model for logistics and focusing on our proven service strengths such as consolidation, deconsolidation and warehouse management.”

New terminal business unit
From 2008, NOL will establish and report the results of a new container terminals business unit – APL Terminals. Pro forma accounts provided today detail financial and performance information on the new Terminals unit. These show that if the Terminals unit had been operating as a separate business, with charges at arm’s length, it would have delivered revenue of US$609 million and EBITDA of US$113 million in 2007.
The team appointed to manage the new business comes from NOL’s existing management talent pool. The new President of APL Terminals, Steve Schollaert, has been with the NOL Group for 18 years. Mr Schollaert reports to the NOL Group CEO as part of the company’s Group Executive Team.
Announcing the establishment of the new unit, Dr Held said: “Our Terminal assets are a valuable part of our portfolio. They are a critical component in our ability to deliver reliable, time-definite services. We recognise there is potential to expand our network by securing new concessions in geographies where customer demand is greatest and congestion is an issue.”
APL Terminals operates facilities at Los Angeles, Seattle, Oakland and Dutch Harbour in North America. Its Asian terminals are at Kaohsiung, Yokohama and Kobe. In addition, APL Terminals has investments in facilities at Ho Chi Minh City, Vietnam and Laem Chabang, Thailand.

Final dividend
The NOL Board of Directors has recommended a final tax-exempt (one-tier) dividend of 10 Singapore cents per share to be paid on 5 May 2008 to the shareholders whose names appear on the Company’s share register at close of business on 22 April 2008. This is in addition to the interim tax-exempt (one-tier) dividend of 4 Singapore cents per share paid in September 2007. The total dividend for the performance year 2007 will be 14 Singapore cents per share.