Singapore's Neptune Orient Lines (NOL), parent company of APL and APL Logistics, has reported a 57 per cent plunge in net profit before non-recurring items of US$344 million for 2006.

The group's core EBIT (Earnings Before Gross Interest Expense, Tax and Non-Recurring Items) was $401 million, 55 per cent lower than the 2005 Core EBIT of $898 million.

Revenues amounted to $7.3 billion, according to a company statement.

Revenues from the group's liner business came to $5.95 billion, in line with the prior year. There was a seven per cent drop in average revenues per FEU, while container volume grew by eight per cent, reflecting high demand across all trade routes. Liner network capacity increased by 6 per cent while headhaul utilisation averaged 96 per cent, in line with the prior year, reflecting strong demand.

Logistics revenues were $1.31 billion, up 2 per cent with Asia-Middle East region registering the strongest year-on-year revenue growth - accounted for 19 per cent of the total. Strong volume growth in ocean forwarding improved International Services revenues, but margins were compressed by declines in ocean freight rates.

NOL Group president and CEO Thomas Held said: "NOL delivered a solid performance in 2006 in the face of a difficult operating environment. Our results show the combined impact of lower average freight rates and increased fuel costs over the past year."

The statement pointed out that freight rate and fuel price factors have adversely impacted the operating results of the industry, with a number of companies reporting significant drops in profitability.

"In our liner shipping operations, we again executed well our approach of keeping our network tight and maximising yields," said Dr Held. "We achieved high utilisation rates, averaging 96 per cent in the headhaul direction for all trade lanes, in line with the previous year.

Looking ahead, NOL plans to accelerate its growth in 2007 with a total of seven ships to enter the APL fleet, growing capacity by 10 per cent. Considerable investment is also planned in both dry and refrigerated container (reefer) equipment, and to improve the company's IT systems.