CP Ships Ltd
announced unaudited Q4 2001 operating income of US$35mn before
exceptional charges, in line with the previous quarter's $34mn
but down from the record $47mn in Q4 2000. Basic earnings per
share were 31 cents and, before goodwill and exceptional charges,
were 36 cents. Volume at 468,000 TEU was flat compared with both
Q3 2001 and Q4 2000. However, average freight rates were 6% lower
than Q4 2000 and 4% down from the Q3 2001. Cash from operations
before exceptional charges was $44mn in the quarter or 55 cents
per share. Net income available to common shareholders for Q4
2001 was $25mn compared to $40mn in the same period in 2000.
For 2001 as
a whole, container carryings at 1.84mn TEU were slightly higher
than 2000, while the average freight rate was up 1%. Operating
income for the year was $139mn before exceptional charges compared
with $164mn in 2000. Basic earnings per share were 92 cents and
before goodwill and exceptional charges were $1.57. Cash from
operations before exceptional charges was $188mn or $2.36 per
share compared with $174mn or $2.19 per share in 2000. Return
on capital employed for the year was 13.1% compared to 21.1% for
2000, well above CP Ships' cost of capital. Net income available
to common shareholders for 2001 was $73mn compared to $133mn in
CP Ships achieved annualised cost savings of more than $120mn
by replacing chartered ships with owned ships and through charter
renewals, organisational changes and other operating efficiencies.
These savings were offset by increased costs from new services
based on slot charters. The ship fleet was reduced from 84 on
30 September to 78 on 31 December in response to market conditions.
difficult market conditions and compared with expected industry
returns, performance in 2001 was strong. Global containership
capacity increased by 12% while container trade growth slowed
significantly mainly due to the economic recession in the US and
slow growth in Europe. Trade conditions continue to deteriorate
with low economic growth forecast through at least the first half
of the year.
In the Asian
market, for the fourth quarter, continuing losses in the Asia-Europe
services which started in 2001, led to an overall operating loss
of $13mn compared with a profit of $4mn in the same quarter 2000.
Average freight rates declined 6% from the Q3 with more stable
freight rates in the India services partly mitigating sharper
declines in the Asia-Europe services.
loss of $13mn in 2001 compares with a $20mn profit in 2000. Although
volume increased more than 50%, operating costs were significantly
higher due to the start of the new Asia-Europe services where
competition from excess trade lane capacity affected freight rates