CP SHIPS SUFFERS 40% DROP IN 4TH-QUARTER AND ANNUAL PROFITS

CP SHIPS SUFFERS 40% DROP IN 4TH-QUARTER AND ANNUAL PROFITS

   CP Ships reported a 40-percent decline in its net income for the fourth quarter, to $25 million, the London-based shipping group’s first set of quarterly results since it became listed on the stock market in October.

   The net result compares with a net income of $42 million in the fourth quarter of 2000.

   Operating income before exceptional charges for the latest quarter dropped by 23 percent, to $36 million, from $47 million a year earlier. Revenue dipped by 2 percent, to $669 million, from $686 million.

   Volume at 468,000 TEUs for the fourth quarter was flat compared with both the fourth quarter of 2000 and the third quarter of 2001. However, average freight rates were 6 percent lower than in the fourth quarter 2000 and 4 percent down from the third quarter of 2001.

   For 2001 as a whole, CP Ships posted a net income of $76 million, 44 percent lower than the $135 million profit earned in 2000. The result for 2001 included $36 million of spin-off and restructuring charges. Operating income before exceptional charges decreased to $139 million last year, from $164 million in 2000.

      CP Ships’ revenue for 2001 totaled $2.65 billion, the same as in the previous year.

   The CP Ships group, which includes Canada Maritime, Cast, Contship Containerlines, Australia-New Zealand Direct Line, Lykes Lines and TMM Lines, carried a total of 1.84 million TEUs in 2001, up slightly from 1.83 million TEUs in the previous year.

   CP Ships cited “increasingly difficult market conditions” last year, as global containership capacity increased by 12 percent while container trade growth slowed significantly.

   “During 2001 CP Ships achieved annualized cost savings of more than $120 million by replacing chartered ships with owned ships and through charter renewals, organizational changes and other operating efficiencies,” CP Ships said.

   The group warned that the current market downturn will be accentuated by continuing excess capacity from ship deliveries expected throughout 2002 and into 2003.

   “Therefore the seasonally weak first quarter will be poor, and may show a modest loss,” it said.

   “We are confident that we will continue to outperform the industry,” a spokesman said.