P&O H1 operating profits register a 12 percent dip |
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Sat, 13 Aug 2005 13:05
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LONDON - The Peninsular & Oriental Steam Navigation Co has announced that the underlying operating profit for the first-half of the year fell by 12 percent even as its ports and ferries division performed exceptionally well. However, the company said that the fall in the profits was in line with expectations as there was a significant reduction in the property segment.
Peninsular & Oriental Steam Navigation Co also said that the full-year operating profits were set to beat those of the last year. The property and container shipping segments are excluded from these predictions. The London-based company said that the net income for the six months ending June 30 rose to £220.1 million as against the £54.9 million reported at the same time last year. The sales figures were also cheerful with a 20 percent growth to £1.4 billion. These figures were also helped by the sale of P&O's entire 25 percent shareholding in Royal P&O Nedlloyd in June. The U.K.'s largest port operator also revealed that the underlying earnings fell to £111.5 million but remained upbeat about the rest of the year.
Commenting on these figures, P & O chief executive Robert Woods said, "We have made considerable progress during the last six months. We have continued to expand our ports business worldwide, most notably with the conditional approval for our London Gateway project. Volume growth is slightly lower than previously expected but yield improvements are offsetting this."
Analysts have forecast that the port business is expected to grow by 7-8 percent as against the expected 8-9 percent. This is especially true in the UK and Australia, where economic conditions continue to be challenging. P & O Chief Financial Officer Nick Luff was of the opinion that the restructuring of the ferry business would be a massive plus and lift the operating profit between £20 million and £25 million. He also asserted that they were not going to dispose off the refrigerated warehousing segment, "The cold logistics business very much remains part of the group. Clearly it's not a business that in comparison to the ports business we're investing significant amounts of capital into but it very much remains part of the group," he said. P & O shares fell by 6.75 pence to 320.25 pence in early trading.
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