Page 4: of Maritime Reporter Magazine (October 2001)

NOL Reports First Half Profit of $1M

The tough economic situation and business environment has not prevented

Neptune Orient Line from first half profits, as the company announced $ 11 million profits (albeit down 78 percent from 1H 2000 profits) on revenues of $2.3 billion (up 6 percent from 1H 2000 revenues.)

In summarizing his company's results,

Flemming R. Jacobs, NOL Group president and CEO, said "We have achieved much. We came from a difficult past and we are on the right track to return to full health, but we are not there yet. We would have preferred a little more time to consoli- date all we have achieved and are achieving before having to deal with a severe downturn in the economic envi- ronment like this one. We will continue our strategy, but it will take us a little longer to reach our goals." "Today the NOL Group is clearly focused on building its three core busi- nesses: APL, the Liner business; APL

Logistics (APLL); and the tanker busi- ness, American Eagle Tankers (AET).

APL Liner

Volumes in Europe were up 14 per- cent and rates up 1 percent, while in

Asia/Middle East rates were up three percent. These gains were undermined particularly by a significant reduction in both rates and volumes in trades touch- ing the Americas (rates down 4 percent, volumes down 5 percent). The overall result for the first half of 2001 was a drop in APL Liner revenues of 2 percent to $1.77 billion and a drop in Earnings

Before Interest and Tax (EBIT) of 68 percent to $31 million. "We are in the process of rejuvenating our fleet, and the vast majority of the newbuilds are chartered in, which pro- vides flexibility without taxing the bal- ance sheet. We are dealing with low growth by returning other chartered in vessels to their owners as new vessels that are more cost efficient come on line," Jacobs said.

Chartering

Chartering revenues increased 24 per- cent to $180 million in 1H01. EBIT rose 268 percent from $13 million to $48 million. "Our tanker business,

American Eagle Tankers (AET), contin- ues to be a bright spot, contributing well to both revenue and the bottom line," said Joseph Kwok, COO, CEO and president of AET and the Chartering

Division.

A marked improvement in Aframax crude oil tanker rates of 40 percent, from $22,000 to more than $30,000 per day over the same period in 2000, con- tributed to the improved result. "We added a further two Aframax tankers through time charter in the first half of this year, taking our fleet to 24," Kwok said. "We are on track to have an entirely double-hulled fleet as planned by 2003." None of the current fleet is single-hulled. "We disposed of another dry bulk car- rier during the first half of this year, leaving four modern Panamax bulk car- riers," Kwok said. "Our intention is still to exit this business over time."

Overall, expectations for the Charter- ing Division for the full year are posi- tive and better than the solid results of 2000.

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