[ P&O Nedlloyd Suffered Operating Loss $18M Second Qu ]

P&O Nedlloyd Suffered Operating Loss $18M Second Quarter 1999

P&O Nedlloyd Container Line suffered an operating loss of $18 millio
n in the second quarter of this year, compared to an operating profit
of $22 million in the equivalent three months of 1998.

According to the P&O Nedlloyd and foreign sources, blamed for the ne
gative result was a year-on-year downturn in per-TEU revenue of nine p
ercent, largely brought about by lower rates in transatlantic and nort
h-south trades.

Stronger container flows westbound from Asia to Europe and eastbound
across the Pacific which were seen late in the quarter were unable to
offset the unfavorable condition in the other trades.

Overall, P&O Nedlloyd carried 706,100 TEUs of containers in this yea
r's April-June quarter, 12 percent more than the 629,200 TEUs moved in
the equivalent three months of 1998.

However, 1999 second-quarter revenue per TEU fell to $1,258 from las
t year's $1,380, at the same time dipping three percent compared to th
e average earned in the first three months of this year.

Totap revenue for the second quarter was $888 million for the equiva
lent three months of 1998, with the January-June total for this year c
oming to $1.72 billion against $1.64 billion last year.

Container volumes rose in each of P&O Nedlloyd's three trade divisio
ns: Europe/Asia, North America, and north/south and cross trades.
On the Europe/Asia routes, the line carried 261,800 TEUs, bringing,
throughput for the first half of this year to 500,300 TEUs. The compa
rable figures for 1998 were 235,700 and 443,200 TEUs, respectively.

In the North America trades, 195,100 TEUs were carried, with the tot
al to June 30 coming to 376,000 TEUs. Last year, 169,700 TEUs were mov
ed in the second quarter and 301,500 in the first half.

In north/south and cross trades, total volumes reached 249,200 TEUs
for the quarter and 469,000 for the first six months, with the compara
ble 1998 numbers being 223,800 and 431,400 TEUs, respectively.

Meanwhile, overall half-year totals were 1,345,300 TEUs for 1999 as
against 1,176,100 TEUs last year.

Cost wise, P&O Nedlloyd said that it cost-cutting efforts had been s
et back by the need to take measures to avoid Y2K-related problems. Ho
wever, the company indicated, it was now ready to embark on a new phas
e of its cost-saving program.

In consequence of its negative operating result, P&O Nedlloyd posted
a pretax loss for the second quarter of $32 million earned in the sam
e three months last year.

For the first six months of this year, the carrier accumulated losse
s before tax of $68 million, compared to losses of $30 million for the
equivalent period of 1998.