CP SHIPS REPORTS 7% DECREASE IN 2ND-QUARTER NET INCOME

CP SHIPS REPORTS 7% DECREASE IN 2ND-QUARTER NET INCOME

   CP Ships reported a net income before goodwill charges and preferred dividends of $38 million for the second quarter, down 7 percent from the same quarter in 2000.

   Revenue edged up by 3 percent, to $676 million, from $658 million in the second quarter last year, while average freight rates increased by 4 percent.

   The volume of containers carried by CP Ships increased by 1 percent over the second quarter of 2000, to 468,000 TEUs.

   Operating income dropped by 13 percent, to $39 million, from $45 million.

   CP Ships said that its $39-million second quarter operating income was down on the corresponding quarter last year, but up from $31 million in the first quarter of this year.

   “The contribution from the transatlantic market was down as overall volume declined by 10 percent due to slower U.S. economic growth and increased competition,” CP Ships said. Average transatlantic rates improved when compared to last year, but fell slightly from the first quarter.

   CP Ships said that results from its Asian services were lower “due to increased competition in the Europe/India/Pakistan trade lane and initial losses on the new Asia/Europe service.” CP Ships-owned carriers Lykes Lines and Contship Containerlines entered the Asia/Europe container trade in March.

   In the Australasian market, CP Ships said that its operating income improved, with volume up by 4 percent. Results from Latin American services improved “with stable volume and significantly improved average freight rates in most trade lanes.”

   For the first six months of the year, CP Ships reported an operating income of $70 million, down from $71 million last year, and a net income of $67 million, up from $65 million. Revenue for the first six months was $905 million, compared to $902 million in the corresponding period of last year.

   CP Ships, which aims to become a self-standing publicly-listed company by the end of the year, reported its latest quarterly results in U.S. dollars for the first time. Previously, the results of the shipping arm of Canadian conglomerate Canadian Pacific were reported in Canadian dollars.