Neptune Orient Lines, owner of Asia’s largest container line by fleet size, posted its first profit in seven quarters after moving more boxes at higher rates amid a recovery in the global economy.

Second-quarter net income was US$99.7 million ($134.9 million), compared with a US$146.2 million loss a year earlier, the company said in a statement today. Neptune Orient said it expects “significant improvement” in profit for the third quarter.

 

Neptune Orient carried 32% more containers in the quarter as demand for moving clothes, toys and furniture to the U.S. and shipping rates increased. Chief Executive Officer Ron Widdows last month ordered new ships for the first time in three years as the global economy rebounds from a recession that caused industrywide losses of more than US$15 billion last year and pushed companies into mothballing vessels.

 

“Earnings will get better in the third quarter for shipping lines because they’ve been successful in getting higher rates for both U.S. and European destinations,” said Park Eun Kyung, an analyst at Samsung Securities Co. in Seoul. “Those rate increases will be fully reflected into earnings from the third quarter.”

 

Neptune Orient dropped as much as 1.9% and traded at $2.10 as of 10:32 a.m. in Singapore. The stock has advanced 28% this year, the fourth-best performer on the Straits Times Index.

 

Of the 21 analysts covering Neptune Orient tracked by Bloomberg in the past 12 months, nine recommend investors buy the stock, six have “sell” calls, and the remainder have “hold” ratings.

 

The company may post net income of US$68 million this year, according to the average of 20 analyst estimates compiled by Bloomberg. Neptune Orient posted a loss of US$741 million in 2009, the biggest in at least two decades.

 

APL, Neptune Orient’s container-shipping unit, moved 646,000 forty-foot equivalent boxes in the quarter, compared with 489,000 a year earlier, the company said. Average revenue per container rose 22% to US$2,778 in the period, it said.

 

“Volume has grown substantially, we’re handling at historic levels for the company,” Widdows said today at a briefing in Singapore. “The rate improvement will look a little more dramatic in the third quarter.”

 

The company has been “very successful” in increasing rates for the trans-Pacific trade in June and that will be fully reflected into this quarter’s earnings, Widdows said. Rates on the Asia-Europe trade is stable and haven’t seen a decline, APL’s president Eng Aik Meng said.

 

Orient Overseas International, Hong Kong’s largest container line, and Hanjin Shipping Co., South Korea’s biggest, also reported profit in the first half yesterday, helped by the revival in demand.

 

“Our bookings for the third quarter are strong,” Ang said.

 

Imports of cargo into the U.S. through containers may increase 15% this year to 14.5 million 20-foot boxes amid an economic recovery, according to the National Retail Federation.

 

The International Monetary Fund last month raised its forecast for 2010 global growth to 4.6%, the fastest pace since 2007. Global container volume will grow 13% this year after contracting 12% last year, Claire Teng, a Hong Kong-based analyst at Standard Chartered Plc, said in a July 26 note.

 

The company said it won’t pay an interim dividend. Still, it will “consider” a final dividend based on the current policy of annual payout of 20% of net income, according to the statement.

 

Neptune Orient last month ordered as many as 12 container ships worth about US$1.2 billion and plans to increase capacity by 7% this year. Sales at APL rose 54% to US$1.9 billion in the quarter. The unit accounts for about 90% of Neptune Orient’s total revenue of US$2.12 billion.

 

The company will look at market conditions before deciding on further capacity expansions, Widdows said.