NOL Shares Down 6.8 Percent

Shares of Neptune Orient Lines Ltd (NOL) slumped as much as 6.8 percent on Monday morning after it said it expects to book a profit for the full year but that the results would be much lower than the previous year.

The world's sixth largest container ship operator fell to a 17-month low of S$1.08 before crawling back to S$1.11, down $0.05 in moderate trade of more than two million shares.

The Singapore Exchange had suspended the stock after its president and CEO Flemming Jacobs warned of NOL's results in local papers, saying "the expectations now are for much lower results than what we saw last year".

In a statement to the exchange on Monday, NOL said: "Despite the prevailing negative factors, the NOL Group currently still expects to achieve an overall profit for the full year 2001."

NOL said its business would be down compared with last year and that expectations now were for much lower results than last year, which was an exceptional year for the liner industry.

It said liner industry volumes to the United States and Europe had shown little or no growth and freight rates had been under substantial pressure in the first half of the year.

The industry's expectations for the balance of the year were for some, but not substantial, growth in volumes.

NOL said it was continuing its focus on cost management to achieve savings, and that the entire container transportation industry continued to be concerned about the increase in capacity and lower volume growth.

"We had higher capacity costs in the first half of this year compared with last year in accordance with our planned strategy," the company said. NOL added it was dealing with the expected low growth by redelivering around 80 percent of chartered-in capacity as newly chartered vessels that were more cost efficient come on line.