The company, like other container lines around the world, has been adversely affected by overcapacity and pressure on rates. Currency movements have also worked to its disadvantage. It has sought to improve its balance sheet by the sale of its drilling business and other assets.
When the impact of capital gains on the 1995 result is taken into account, the latest quarter showed an improvement of Fl 17 million, the company said. Capital gains in the 1995 quarter were Fl 44 million compared with Fl 2 million this time.
Net profits before extraordinary items in the first nine months fell from Fl 101 million to Fl 44 million but after taking into account capital gains from the sale of Neddrill and other assets net profits rose from Fl 149 million to Fl 313 million.
Earnings per share fell from Fl 2.84 to Fl 1.63 in the third quarter, and during the first nine months from Fl 4.54 before extraordinary items to Fl 1.77. After extraordinaries, earnings per share in the quarter fell from Fl 2.35 to Fl 1.63, but rose from Fl 6.63 to Fl 13.81 in the nine months.
Downward pressure on rates is expected to continue in the fourth quarter, normally a weak period for the company, so it expects to make only a modestly positive'' net profit in the year as a whole.
In 1995 its net profit before extraordinary items fell from Fl 91 million the year before to Fl 49 million. Nedlloyd expects net extraordinary income of Fl 100 million, comprising capital gains of Fl 300 million, mainly from the sale of Neddrill set against a write-down of Fl 200 million on vessels to be allocated to the merged container business formed with P&O.
The balance will be reserved to cover Nedlloyd's share in provisions for the reorganisation of P&O Nedlloyd Container Line in 1997. Operating profits in the container shipping division fell in the third quarter from Fl 32m to Fl 17m an improvement of Fl 27m after taking account of Fl 42m capital gains on asset sales in the 1995 quarter. Increased volumes, cost reductions and more favourable currency movements compensated for an Fl 80m drop in rates. Group turnover rose slightly to Fl 1.72bn in the third quarter and from Fl 5.05bn to Fl 5.13bn in the first nine months. Mr Hendrik Jan Boer, IRIS analyst, said the improved ocean shipping results were the main surprise in the earnings report and accounted largely for the higher-than expected bottom-line result.Mr Corne Zandbergen, Bank Generale analyst, agreed Nedlloyd's ocean shipping business had done well.
