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Press Release
CHAIRMAN'S OPENING REMARKS
TO THE AGM
19th May 2000
At the Annual General Meeting of The Peninsular and Oriental Steam Navigation Company in London
today, the Chairman, Lord Sterling, reported on the Company’s recent progress and prospects for the
current year.
Lord Sterling:
• emphasised the huge opportunity for European cruising and P&O’s excellent position in this market
following the planned acquisition of Festival Cruises;
• announced that P&O had been selected as the preferred operator for the Port Newark container
terminal in New York;
• confirmed the much better trading prospects for P&O Nedlloyd and the expectation of significantly
improved results for the year; and
• confirmed the much better trading prospects for P&O Nedlloyd and the expectation of significantly
improved results for the year; and
Concluding, Lord Sterling said: “Your Board looks to the future with confidence. We are well positioned
in two key areas: the leisure sector with cruises, and logistics for the on-going Group. They both have
excellent growth opportunities. With our strong brands, we are determined to remain at the forefront of
these world businesses.”
Further information:
Peter Smith Director - Communications and Strategy
P&O
020 7930 4343
Victoria Moth Corporate Communications Manager
020 7930 4343
P&O AGM, 19 MAY 2000
CHAIRMAN’S OPENING REMARKS
As you all know, the structure of the Group has been undergoing a number of changes over the last two or
three years. Last year saw the sale of Bovis and Earls Court and of a large part of our investment
property portfolio. Earlier this year the Board decided to demerge our worldwide cruise business from the
ongoing Group to form a separate company.
Each of these steps was strongly welcomed by the stock market and our stock price responded
accordingly. Then in February the US cruise companies announced that while the fundamentals of the
industry remained strong, their results for this year, although expected to be good, were unlikely to be as
high as most people were forecasting. This led to a dramatic reduction in their share prices. Inevitably it
dragged us down as well although our cruise business is more international and we are growing more
quickly. Many stock market commentators are also of the view that the fall in price of the cruise stocks is
exaggerated given the strength of the business.
We are making good progress with the demerger and we are on target for completion in October. At that
time all holders of deferred stock will also become holders of shares in our new cruise company.
We are continuing to see generally strong trading conditions for the Group. The position for cruises
remains very much as previously stated. The fundamentals of the industry are strong. Our latest ships
are offering more and more choice and are continuing to sail 100% full. (Incidentally, Aurora is now
performing extremely well and has attracted highly favourable comments from her first passengers.)
Cruising offers exceptionally good value for money. It is attracting more and more people but still only
accounts for less than 5% of the relevant vacation market.
Last week we announced that we are to acquire one of the leading cruise companies on the Continent,
Festival Cruises. Following our acquisition last year of Germany’s fastest growing cruise company, Aida,
this will consolidate our position as the leading European cruise company and the most international of the
major cruise lines. Festival is a dynamic business with a strong brand name and reputation. By
combining these strengths with those of the P&O Group, we have an excellent platform from which to take
full advantage of the strongly growing European cruise market.
With 350 million people, the European potential is larger than that of the United States and Canada
combined. Europe will be a prime source of passenger growth in the years to come. P&O, with Festival
and Aida, will be ideally placed to capitalise on this.
Turning to the on-going P&O Group, our ports business goes from strength to strength. Already this year
we have entered an exclusivity agreement to redevelop Shellhaven on the Thames and we have been
awarded a concession to establish a terminal at Qingdao, China’s second largest container port. We have
acquired two terminals in Antwerp and the US company Gulf Services in New Orleans, as well as being
the preferred operator for Port Newark in New York. We also opened our major new terminal at Mumbai
which is doing extremely well.
Ferries is making a good transition following the abolition of duty free. The market is growing and rates
are increasing. Our logistics companies – P&O Trans European and Cold Logistics – are continuing to
expand and are increasingly seen as leaders in their sectors. Our container shipping joint venture, P&O
Nedlloyd is experiencing much better trading conditions and, despite high fuel costs, is expecting a
significant improvement in results for the year.
We are moving ahead with our plans to list Associated Bulk Carriers on the Oslo Stock Exchange later
this year. Finally, in property we yesterday completed the £400 million sale of the major part of our
remaining investment portfolio.
As announced earlier this year Tim Harding, who was responsible for our property division, retired from
the Board on 30 April. We have benefited greatly from his immense knowledge of the property sector and
from his wider perspective. We recently announced the resignation of Tim Harris who also made a major
contribution to the Group. We wish them well for the future.
Your Board looks to the future with confidence. We are well positioned in two key areas: the leisure
sector with cruises, and logistics for the on-going Group. They both have excellent growth opportunities.
With our strong brands, we are determined to remain at the forefront of these world businesses.
(ends)
