Return to profits for P&O

PUBLISHED : Monday, 29 November, 1999, 12:00am
UPDATED : Monday, 29 November, 1999, 12:00am

P&O Nedlloyd has reported an operating profit of US$16 million for the third quarter of this year, compared with a loss of $18 million for the second quarter.

After interest and other items, the company had a break even result compared with a profit of $7 million for the third quarter last year.

Increases in transpacific United States inbound trade and Europe-Asia trades were offset by further deterioration in certain north-south trades and the Atlantic.

'The overall trend for the remainder of the year is expected to be mildly positive,' the company said.

Due to strong cargo flows into Asia on the Europe-Asia, transpacific and cross trades, throughput rose by 11 per cent over the previous third quarter.

Although average revenue per teu (20 ft equivalent unit) fell by 3 per cent in the third quarter, compared with the corresponding period last year, the company reported a 5 per cent rise over the second quarter this year.

P&O Nedlloyd said the recent significant rise in bunker prices had adversely affected the third quarter results by about $12 million.

The company spent about $20 million in preparation for the year 2000 and has now completed the exercise.

A detailed plan has been put in place for a systematic reduction in costs.

'This has already identified well in excess of $100 million annualised savings by the end of 2000 and further significant savings thereafter,' it said.