NOL narrows quarterly loss 10 fold to US$10 million, box revenue up 16pc

SINGAPORE`s Neptune Orient Lines (NOL) has reported a first quarter 2011 net loss of US$10 million, greatly narrowing the $98 million net loss made in same period last year.

NOL said first quarter 2011 revenue was $2.4 billion, up 16 per cent from a year ago. First quarter pre-tax profit (EBIT) was $13 million against a corresponding $74 million loss in the same period last year.


"In spite of year-over-year volume growth, a softer than expected Lunar New Year period and rising fuel costs have interrupted our momentum," said NOL Group president and CEO Ron Widdows.


APL, the container shipping unit, posted a 15 per cent quarterly revenue increase to $2.1 billion, still yielding a pre-tax profit loss of $8 million against $89 million corresponding last loss in the same period last year.


First quarter container volume was up nine per cent year on year with per box revenue up three per cent with vessel utilisation at 92 per cent.


"We lifted higher container volumes in the Asia-Europe and intra-Asia trade lanes during the first quarter, and freight rates improved in the transpacific," said APL president Eng Aik Meng.


"But our emphasis must remain on operating efficiency, as well as slow steaming to conserve fuel and counteract the effect of rising fuel prices, which were 28 per cent higher in the first quarter than in 2010," he said.


The APL Logistics unit reported a 24 per cent increase in first quarter revenue year on year with pre-tax profit up 40 per cent to $21 million.


Improvements were attributed to higher volumes and recovering unit rates across various logistics business segments. Contract Logistics revenue increased 23 per cent in the first quarter and international services revenue was up 26 per cent.


"Our commercial performance continues to gain strength across multiple services, which have been improving since the middle of last year," said APL Logistics President Jim McAdam. "We`ve maintained a disciplined focus on cost of operations and are witnessing consistent growth in emerging markets - both in our international logistics business as well as in the contract logistics-automotive segments."


As to outlook the company statement said: "Market conditions remain uncertain. Increased operating costs - particularly related to fuel cost increases - and competitive pressures on rates are expected to continue for the near term. Should these conditions persist, our results will be negatively impacted. Our focus remains on operating efficiency, cost reduction and high vessel utilisation."