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SINGAPORE—Neptune Orient Lines (NOL) Ltd., Southeast
Asia’s largest container-shipping company, gained the
most in almost two weeks in Singapore on optimism
earnings will rise as it charges more to carry cargo to
the US.
Neptune
Orient shares advanced as much as 4.8 percent to S$3.74
and traded at $3.70 as of the
noon trading in
Singapore on Wednesday. The company, a member of the
shipping group Transpacific Stabilization Agreement, won
approval to raise rates and impose surcharges on the
Asia-US route, Raymond Yap, an analyst at CIMB
Securities Sdn., wrote in a report Wednesday.
Higher
prices on the company’s biggest cargo route will help
offset a 30-percent increase in the cost for bunker fuel
in Singapore. The company, whose profit almost tripled
in the last quarter, had said business this year will be
challenging due to cost pressures.
“Overall
profitability should be better this year,” Yap said in a
note on the company Wednesday after an analysts’ meeting
Tuesday. “We believe the market has underestimated the
strength of NOL’s operating and financial performance.”
Neptune
Orient and members of the Transpacific Stabilization
Agreement had managed to impose a fuel levy for more
than 90 percent of contracts negotiated between May 2008
and April next year, according to Yap. The liners have
also boosted rates by an average of between $400 and
$600 per 40-foot-equivalent box, he added.
The
10-member Westbound Transpacific Stabilization Agreement
said Tuesday it would step up efforts to recover higher
costs by increasing fuel surcharges from July 1.
Neptune
Orient said this week the average revenue per box
climbed 13 percent to $2,940 in the four weeks to May 2,
from the year before. It moved 203,000
40-foot-equivalent units, 14 percent more than the year
earlier.
The
price of 380 Centistoke Bunker Fuel, used by ships,
jumped to a record $644.50 a ton in Singapore on May 23,
according to Bloomberg data. (Bloomberg)
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