Singapore NOL JV Gets India Rail License
Friday March 3, 6:49 PM
UPDATE: Singapore NOL JV Gets India Rail License
SINGAPORE (Dow Jones)--Singapore's Neptune Orient Lines Ltd. (N03.SG), the world's sixth biggest container shipping company by volume, Friday said its joint venture has received approval in principle from the Indian government to provide freight rail services there.
The joint venture, called India Infrastructure and Logistics Pvt Ltd, received a "Category 1" license which enables it to run unlimited trains on all India routes, for an initial period of 20 years which is extendable by another 10 years, NOL said.
NOL said IIL expects to invest between US$60 million and US$70 million over the next two years on the Indian rail operations, which it will initially run between the country's main port of Mumbai and the capital, New Delhi.
NOL has "about a three-quarter" stake in ILL, with Hindustan Infrastructure Projects & Engineering Pvt Ltd owning the rest, a NOL spokesman said. Hindustan Infrastructure is controlled by Indian telecom tycoon Rajeev Chandrasekhar.
"We have considerable experience operating freight rail services. Our APL subsidiary pioneered double-stack trains in the U.S. in 1984. Although the U.S. investment was sold in 1999, we retain considerable managerial and IT expertise in this business," NOL Group Deputy President Cedric Foo said in a statement.
"By investing in landside facilities, we will complement and differentiate our liner services in India and at the same time develop a new stream of logistics income for the Group," he said.
NOL said it intends to invest in "chokepoints," or areas where infrastructure is lacking or congested and the movement of cargo slowed, to offer seamless end-to-end transportation.
Operating in India's growing rail freight industry may help NOL partly offset an expected decline in freight rates as more ships ply the key routes in years ahead.
At the fourth-quarter results briefing on Feb. 28, NOL Chief Executive David Lim said the company planned to partly counter the cyclical downturn in shipping by strengthening the links between its main container liner division and its much smaller logistics business.
NOL reported a 54% on-year fall in fourth-quarter net profit to US$164 million from US$355 million, reflecting higher fuel costs and a $103 million tax writeback in the year-earlier period.
In the fourth quarter, the APL, or shipping, business posted a 24% fall in core earnings before interest and tax to $199 million from $262 million a year earlier.
APL's costs per FEU, or 40-feet equivalent unit, rose 7% on year in 2005 due to higher bunker expenses and inland transportation costs in the U.S., NOL said.
EBIT from the logistics business in the fourth quarter, meanwhile, doubled to $14 million from $7 million in the year-ago period, reflecting higher profit margins.
UPDATE: Singapore NOL JV Gets India Rail License
SINGAPORE (Dow Jones)--Singapore's Neptune Orient Lines Ltd. (N03.SG), the world's sixth biggest container shipping company by volume, Friday said its joint venture has received approval in principle from the Indian government to provide freight rail services there.
The joint venture, called India Infrastructure and Logistics Pvt Ltd, received a "Category 1" license which enables it to run unlimited trains on all India routes, for an initial period of 20 years which is extendable by another 10 years, NOL said.
NOL said IIL expects to invest between US$60 million and US$70 million over the next two years on the Indian rail operations, which it will initially run between the country's main port of Mumbai and the capital, New Delhi.
NOL has "about a three-quarter" stake in ILL, with Hindustan Infrastructure Projects & Engineering Pvt Ltd owning the rest, a NOL spokesman said. Hindustan Infrastructure is controlled by Indian telecom tycoon Rajeev Chandrasekhar.
"We have considerable experience operating freight rail services. Our APL subsidiary pioneered double-stack trains in the U.S. in 1984. Although the U.S. investment was sold in 1999, we retain considerable managerial and IT expertise in this business," NOL Group Deputy President Cedric Foo said in a statement.
"By investing in landside facilities, we will complement and differentiate our liner services in India and at the same time develop a new stream of logistics income for the Group," he said.
NOL said it intends to invest in "chokepoints," or areas where infrastructure is lacking or congested and the movement of cargo slowed, to offer seamless end-to-end transportation.
Operating in India's growing rail freight industry may help NOL partly offset an expected decline in freight rates as more ships ply the key routes in years ahead.
At the fourth-quarter results briefing on Feb. 28, NOL Chief Executive David Lim said the company planned to partly counter the cyclical downturn in shipping by strengthening the links between its main container liner division and its much smaller logistics business.
NOL reported a 54% on-year fall in fourth-quarter net profit to US$164 million from US$355 million, reflecting higher fuel costs and a $103 million tax writeback in the year-earlier period.
In the fourth quarter, the APL, or shipping, business posted a 24% fall in core earnings before interest and tax to $199 million from $262 million a year earlier.
APL's costs per FEU, or 40-feet equivalent unit, rose 7% on year in 2005 due to higher bunker expenses and inland transportation costs in the U.S., NOL said.
EBIT from the logistics business in the fourth quarter, meanwhile, doubled to $14 million from $7 million in the year-ago period, reflecting higher profit margins.
posted by SmartYInvestor at 1:32 AM
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