P&O GROUP POSTS 17% RISE IN HALF-YEAR OPERATING PROFIT
United Kingdom-based Peninsular and Oriental Steam Navigation Co. reported a 17 percent increase in operating profit before interest from continuing operations for the first half of the year, to '258 million ($374 million).
In the year-earlier period, the P&O group had a pro forma operating profit, excluding discontinued operations, of '220 million.
Group revenue from continuing activities reached '1.99 billion ($2.88 billion), up from pro forma revenues of '1.67 billion in the first half of 1999. The group’s revenue for the first half was also down by 41 percent on the '3.37 billion in revenue for the first half of 1999, which included contruction and other businesses now sold by P&O.
P&O said that P&O Ports and P&O Nedlloyd performed strongly. These divisions more than offset a lower result from P&O Ferries and the reduction in operating profit following the sale of some businesses in 1999, the British group said.
P&O Ports had an operating profit of '40 million ($58 million) in the six-month period under review, up from '27 million in the first half of 1999. P&O Ports’ revenue soared by 61 percent, to '234 million ($339 million), from '145 million.
P&O’s ferries business returned an operating loss of '7 million ($11 million), compared to a profit of '19 million in the first half of 1999.
Logistics activities made an operating profit of '12 million ($17 million), up from '10 million.
Cargo shipping activities, which include bulk-shipping subsisidiary Associated Bulk Carriers and P&O’s share in P&O Nedlloyd Container Line, had an operating profit of '13 million ($19 million), compared to a loss of '24 million. P&O Nedlloyd contributed '10 million ($15 million) and Associated Bulk Carriers '3 million ($4 million) to group operating profits.
Property and cruise shipping posted the bulk of the group’s operating profits. These two divisions had a total operating profit of '200 million ($290 million) in the latest six-month period, up from '188 million.
The P&O group will hive off its cruise shipping business as a separate publicly-listed company, P&O Princess Cruises, at the end of October.
Following the demerger, the future P&O group will concentrate on logistics and transportation businesses.
The group said that P&O Ports, with interests in 28 terminals in 16 countries, achieved a container throughput of 5.8 million TEUs in 1999 and will handle about 8 million TEUs this year. “Further container terminal investment will be a main area for future capital expenditure by the group,” a company spokesman said.
The group made no detailed comments on its plan to list P&O Nedlloyd on the stock market. “We are continuing to examine options for a listing while bearing in mind P&O Nedlloyd’s strong synergy with P&O Ports and the opportunities to grow its logistics capabilities on the back of its extensive relationships with major international customers,” a company spokesman said.