NOL Group 2001 Interim Results (1H)

    2001 1H Group Revenues    US$2.3 billion    UP 6% from 1H00

    2001 1H EBITDA            US$203 million    DOWN 16% from 1H00

    2001 1H EBIT              US$78 million     DOWN 36% from 1H00

    2001 1H Overall Profit    US$11 million     DOWN 78% from 1H00


    Summary

    - Group profit sustained but business slows
    - APL Liner impacted by supply/demand pressures as world trade falls.
      Freight rates decline
    - APL Logistics revenue growth on target; but building for the future
      impacts EBIT
    - American Eagle Tankers (AET) holding its own
    - Group continues implementation plans for future growth across all core
      businesses

    "We have achieved much.  We came from a difficult past and we are on the
right track to return to full health, but we are not there yet.  We would have
preferred a little more time to consolidate all we have achieved and are
achieving before having to deal with a severe downturn in the economic
environment like this one.  We will continue our strategy, but it will take us
a little longer to reach our goals."
    Mr. Flemming R. Jacobs
    NOL Group President and CEO




                     Revenues Up but Bottom Line Reduced

          Dealing With the Downturn: NOL Continues to Make a Profit

    SINGAPORE, Sept. 6 Global transportation and logistics
company Neptune Orient Lines Ltd. (NOL) achieved an overall profit of
US$11 million for the six months ending June 30 on revenues of US$2.3 billion.
    Revenues increased by 6% on the record US$2.2 billion in the first half of
2000, but overall profit was down 78%.  "2001 is proving a tough year -- and,
while this result is disappointing, we have to remember where we started from
and accept that sustained profitability is not achieved magically overnight,"
NOL Group President and CEO Flemming Jacobs said today.  The Group recorded
serious losses in 1997-98 when the Asian crisis hit just as it had purchased
the American liner business, APL.  "Today the NOL Group is clearly focused on
building its three core businesses:  APL, the Liner business; APL Logistics
(APLL); and the tanker business, American Eagle Tankers (AET).  This is on
target.  As part of the growth plans, APL Logistics increased its contribution
to Group revenues to 14% from 9% in the first half of 2001," Mr Jacobs said.
    Earnings Before Interest and Tax (EBIT) for the Group fell 36% from
US$122 million to US$78 million, and Earnings Before Interest, Tax,
Depreciation, and Amortization (EBITDA) fell 16% from US$241 million to US$203
million.  This was largely due to the impact of the economic slowdown on the
Liner business, which made up 76% of the Group's revenue in the first half of
2001, and to the implementation of previously announced growth strategies for
the Logistics business.  Overall profit was also impacted by the
US$1.7 billion in debt, which the Company still carries.
    "We said two years ago that our strategy was to build strength into our
organization and into our network and, together with aggressive on-going cost
management, this would create a resilient core structure to enable us to
remain profitable even when times were tough," Mr. Jacobs said.
    "We have achieved much.  We came from a difficult past and we are on the
right track to return to full health, but we are not there yet.  We would have
preferred a little more time to consolidate all we have achieved and are
achieving before having to deal with a severe downturn in the economic
environment like this one.  We will continue our strategy, but it will take us
a little longer to reach our goals."

    APL Liner
    It has been particularly tough for the liner business, APL, Mr Jacobs
said.  "Many of our APL customers are hit by the downturn and therefore so are
we.  But if we are to continue to meet their container transportation needs,
we need to keep our eye on the future while ensuring we are making the most of
the efficiencies we have made over the past two years -- and continue to find
more."
    Volumes in Europe were up 14% and rates up 1%, while in Asia/Middle East
rates were up 3%.  These gains were undermined particularly by a significant
reduction in both rates and volumes in trades touching the Americas (rates
down 4%, volumes down 5%).  The overall result for the first half of 2001 was
a drop in APL Liner revenues of 2% to US$1.77 billion and a drop in Earnings
Before Interest and Tax (EBIT) of 68% to US$31 million.
    "We are building strength back into the Liner business after a difficult
few years and achieving a better geographical balance for our transportation
activities.  The weakening supply/demand picture affected freight rates in all
East/West trades and we gradually had to adjust freight rates.  We are also
adjusting capacity in light of the lower trade volumes.
    "With Liner, as across the whole Group, we have maintained an aggressive
focus on cost management.  This has supported our variable contribution
margins as rates were falling," Mr. Jacobs said.  "Fixed costs rose because of
the introduction of the previously announced new services in Europe and Asia,
in line with the Group's strategy to reduce APL's vulnerability to ups and
downs, particularly in the trans-Pacific trade.
    "We achieved what we set out to achieve in Europe, gradually and
responsibly expanding our business there," Mr Jacobs said.  "We need to be
less reliant on the trans-Pacific trade in the Liner business and we have
worked hard to develop our market in Europe and extend our network in Asia.
This is beginning to show," he said.
    "We are in the process of rejuvenating our fleet, and the vast majority of
the newbuilds are chartered in, which provides flexibility without taxing the
balance sheet.  We are dealing with low growth by returning other chartered in
vessels to their owners as new vessels that are more cost efficient come on
line," Mr. Jacobs said, and added, "We are in this business for the long haul
and we are adding capacity carefully.  Trade growth will continue, albeit more
slowly, and we need to make sure we have the ships and services that will be
needed to cater for growth in a cost-efficient manner.  Similarly, we continue
investing in people and training and fine-tuning our operations.
    "We will continue to make adjustments to our services as we go forward to
ensure that we are making the most efficient use of our fleet and meeting the
needs of customers in the most flexible way," Mr. Jacobs said.

    Outlook for Liner
    "As I have said, the short term for the Liner business is not bright.
Rates have declined in several main trades since late last year and although
they are stabilizing, we will have the full impact over the rest of this year
and probably into at least part of 2002," Mr. Jacobs commented.  "With the
continued uncertainty about global economic developments, we expect the full-
year result for Liner to be substantially less than for 2000.
    "We will continue our aggressive cost management, including the
development of information technology products that will improve efficiencies
for our customers and increase productivity for us."

    APL Logistics
    Net revenues for APL Logistics (APLL) leaped 63% to US$330 million, as a
result of increased business activities and the successful acquisition and
integration of US-based GATX Logistics (GATXL) earlier this year.  However,
there was negative EBIT of US$9 million, down from positive US$10 million for
the same period last year, due to acquisition and one-time development costs.
    "Revenue really took off with the acquisition of GATXL," said Dick
Metzler, CEO of APLL, "and was also boosted by 18% organic growth.  However,
the costs of acquiring GATXL in the first half of this year had an impact on
core EBIT.
    "The company also made necessary and significant investment in two new
business areas:  See Change Technologies (SCT) and APL Direct Logistics, and
it will take time to realize their potential," Mr. Metzler said.
    SCT is developing a new generation of IT tools that will give customers
greater visibility of their inventory as it moves through the supply chain
from the factory floor to customer door.
    APL Direct Logistics was formerly e-Logistics, and was part of GATX
Logistics when APLL acquired it.  "At that stage it was focusing on servicing
dotcoms," Mr. Metzler said.  "With the bursting of the dotcom bubble, we
needed to refocus this part of the business.  This has cost us some money.  It
is now working on e-fulfillment, which is the process by which goods ordered
over the Internet are delivered directly to the customer's door and is very
much a partnership approach with successful e-tailers."
    Mr. Metzler said, "With the aggressive goal of rivaling the liner business
as a major breadwinner for the Group in three to five years, we will, from
time to time, have growth spurts such as we have had in the first half of this
year, as well as organic growth.  This growth path may be unconventional but
it is consistent with our strategy for achieving our goal."

    Outlook for APL Logistics
    The outlook for 2002 is positive and the company has a strong future,
Mr. Metzler said, but soft market conditions and weaker demand coupled with
the cost of integration and investment will impact the Logistics business
results overall for the full year 2001.  But business is picking up, he said.
"We are having success in building our business for the future; for example,
contracts with just four of our customers, Dow Corning, The Toro Company,
Colgate-Palmolive Company, and Procter & Gamble, amount to $US163 million of
revenue for us over the next five years, and this is just the beginning.
    "We are building our capabilities in terms of our geographic coverage and
the depth, breadth and complexity of our network.  In addition, with the
development of SCT we will be providing exactly the visibility tools our
customers are telling us they want.
    "However, the capabilities we have today are also being recognized," he
said, highlighting that customers had this week voted APLL onto the
top-10 list of third-party logistics (3PL) providers in the United States in a
poll run by Inbound Logistics magazine.  "It's a feather in our cap,"
Mr. Metzler added.
    Mr. Metzler said the current fundamentals provided a platform for growth
and the company was looking at significant opportunities in Europe, involving
acquisitions or joint ventures.
    China was also providing growth opportunities, he said.  "Important
alliances with Eastern China Railway Express and Shenyang Transportation Group
were recently announced that will extend the APLL network into inland China by
road and rail," he said, "and APLL has launched new less-than-container-load
(LCL) services for freight moving from multiple points in China to the United
States.  Further developments in China are expected in the next few months."

    Chartering
    Chartering revenues increased 24% to US$180 million in 1H01.  EBIT rose
268% from US$13 million to US$48 million.
    "Our tanker business, American Eagle Tankers (AET), continues to be a
bright spot, contributing well to both revenue and the bottom line," said
Joseph Kwok, Chief Operating Officer and CEO and President of AET and the
Chartering Division.
    A marked improvement in Aframax crude oil tanker rates of 40%, from
US$22,000 to more than US$30,000 per day over the same period in 2000,
contributed to the improved result.  "We added a further two Aframax tankers
through time charter in the first half of this year, taking our fleet to 24,"
Mr. Kwok said.  "We are on track to have an entirely double-hulled fleet as
planned by 2003."  None of the current fleet are single-hulled.
    "We were disappointed that the financial market conditions didn't allow us
to complete a separate listing proposed earlier this year.  However, this does
not affect our business and expansion plans," Mr. Kwok said.
    "We disposed of another dry bulk carrier during the first half of this
year, leaving four modern Panamax bulk carriers," Mr. Kwok said.  "Our
intention is still to exit this business over time."

    Outlook for Chartering
    "Although the tanker market has come off the peak it experienced during
the first part of this year, we expect the sector to remain stable for the
balance of the year," Mr. Kwok said.  "With more cargo contracts, our tanker
business is somewhat protected from market volatility in the near term."
    Overall, expectations for the Chartering Division for the full year are
positive and better than the solid results of 2000.

    NOL Group Outlook
    "This year is not going to get any easier for the NOL Group," Mr. Jacobs
said.  "With the current operating environment, we expect overall results for
the full year 2001 to be significantly lower than last year's record results.
Key reasons are more difficult operating conditions for the Liner business and
the expansion of the Logistics business.
    "In addition, while we have reduced the level of our debt over the past
two years in the wake of the Asian crisis and the purchase of APL, it is still
a drain.  However, our cash flow is strong.
    "We will weather the storm, with an on-going focus on efficiencies across
all businesses.  We will prepare for the future in areas that will bring
long-term benefits, including growing APL Logistics, investing in China,
strengthening our business in Europe and further building on the successful
crude oil transportation business.
    "We will continue to innovate, pursue new opportunities, primarily for APL
Logistics, push boundaries and lead change.  We will work with our customers
to meet their needs in good times and not so good times as we have in the past
and as we will in the future.  This is what generates lasting business
relationships and on-going opportunities, which in turn benefit customers and
shareholders," Mr. Jacobs said.

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