Neptune Orient Lines Ltd (NOL), the world's seventh-largest container shipping group, posted a better-than-expected eight-fold jump in quarterly profit on Thursday and expects 2004 profits to improve on last year.
NOL, one third-owned by the Singapore government, said it earned US$163.2 million in the quarter ended on April 2 against $20.3 million a year earlier.
Chief Executive Officer David Lim said the company was on track to beat its 2003 record profit of $429 million this year.
Lim said growing volumes, particularly out of Asia, and profits would enable NOL to continue paying dividends over time. NOL paid 3.85 Singapore cents per share in dividends last year.
The company is targeting average annual double-digit growth in revenues over the next five to 10 years.
NOL, which sources about 80 percent of its revenues from its liner business and the rest from logistics, said revenue was up 16 percent to $1.55 billion in the first quarter.
Average freight rates rose 14 percent to US$2,543 per 40-foot equivalent unit (FEU) in the first quarter from a year earlier and volumes grew 11 percent to 442,000 FEUs.
Analysts expect shipping firms like NOL to fare strongly in 2004 as world trade grows, but the prospect of more ships entering a tight market and a slowing in China's economic growth may see freight rates peak this year.