P&O Nedlloyd Container Line, a joint venture between Britain's P&O and Rotterdam-based Nedlloyd, is the world's third-largest container shipping line.

In the fourth quarter of 2.002 P&O Nedlloyd made an operating loss of U$D 49 million compared with a loss of U$D 46 million in Q3. This result in an operating loss for the year of U$D 206 million. The company announced that clearly there are uncertainties surrounding the economic outlook but if current trends continue the 2003 result should be significantly improved while cost-cutting remains on target.

Total throughput for P&O Nedlloyd increased by 12% to 3.6 million teu (2001 3.2 million teu), compared to an increase in slot capacity of 5%. The operating loss was principally due to a decline in average freight rates, which fell 12% year on year due to doubts about whether the growth rate of world container trade would be maintained, and the introduction of significant new capacity into the industry.

Against this, P&O Nedlloyd achieved cost savings of U$D 290 million annualised at the end of 2002 and remains on course to deliver savings of U$D 350 million annualised by the end of 2003. Cash flow remained positive and net debt was reduced by U$D 12 million to U$D 693 million.

P&O Group is seeking to reduce their interests in P&O Nedlloyd Container Line. Group Chairman Lord Sterling stressed the top priority is their commitment to reduce their investment in the joint venture company, P&O Nedlloyd. Philosophy is to took capital out of those areas where did not believe that P&O could achieve market leadership.

The Group plan to direct capital to the strongest growing areas of the business where they have a competitive advantage as Port Container terminals and ferries businesses, which are central to the future growth of the company and which achieved a significant increase in profit last year.

P&O Ports generated an operating profit of U$D 186.9 million. Operating profit for container terminals increased by 16% to U$D 158.4 million. Container traffic rose 23 per cent to 8.949 million TEUS as the company spent U$D 144 million on new facilities in Shekou in China; Manila, Le Havre, Marseilles and Vancouver.These will increase total installed capacity by approximately 1.5 million teus.

In the Americas, Terminales Rio de la Plata in Buenos Aires reported volumes down almost 20% as trade with Argentina contracted during the economic crisis. The terminal remains profitable, however, and an improving trend on exports was evident in the second half of 2002.

During 2002 P&OPorts invested approximately U$D 120 million in developing existing terminals, primarily in Australia and at New York and Southampton. Further de velopment also took place at Manila in the Philippines, Chennai in India, Colombo in Sri Lanka and Qingdao in China.

Ferries – consolidation of P&O Stena Line and the major reorganisation of the P&O Ferries business should enable the group to achieve a profit of U$D 50 million.