NOL Lost $245 Million in First Quarter

Neptune Orient Lines said today it lost $245 million in the first quarter of 2009, compared to the profit of $121 million for the same period of 2008.

Revenue dropped by 36 percent to $1.543 million from $2.407 million in the first quarter of 2008.

The Singapore-based parent of container carrier APL said today its performance during the quarter had been hit by a significant decline in global trade flows and liner shipping volumes. In addition, freight rates deteriorated across all major trade lanes.

NOL said it anticipates a continuation of adverse business operating conditions in the rest of the year and reiterated that it expects to post a significant full year loss.

NOL lost $222 million at the core EBIT level in the quarter.

NOL Group President and Chief Executive Officer Ronald D. Widdows said the company had taken a number of steps during the first quarter to “better align the Group’s overall network and cost structures with reduced market demand.”

Widdows said the company would implement further cost-saving initiatives as the year progresses.

First-quarter revenue from APL’s container-shipping business was also 36 percent lower year-over-year at $1.29 billion. Container shipping reported a core EBIT loss of $237 million for the quarter.

Globally, APL carried a total of 481,000 FEUs in the first quarter, down 27 percent down from the same period of last year, as volumes declined in all trade lanes. Headhaul utilization averaged 80 percent.

Container volumes averaged 32,600 FEU per week over the 10- week period from Dec. 27 2008 to March 6, and averaged 38,888 FEUs per week during the four weeks from March 7 to April 3.

In its container shipping business, average revenue per FEU decreased by 16 percent year-on-year to $2,474, primarily due to a combination of lower bunker recovery and freight rate pressures, particularly in the Asia-Europe and Intra-Asia trade lanes.

The logistics and terminals business units made positive core EBIT contributions for the quarter.

APL Logistics reported a 34 percent decrease in first quarter revenue, to $241 million, and core EBIT of $14 million, 18 percent lower than for the same period last year.

“Logistics recorded a substantial reduction in volumes and revenues for the quarter, reflecting global economic uncertainty and declining trade activity,” Widdows said.

“Despite this, the Logistics business improved its core EBIT margin to 5.8 percent through continued disciplined cost management and a focus on revenue quality.”