APL’s parent NOL Group lost $478 million last year, reversing a $461 million profit in 2010, as high fuel costs and lower freight rates produced “disappointing” results for the container shipping line.
Group-wide revenue fell 2 percent year-over-year to $9.2 billion. NOL had core earnings before interest and taxes of negative $377 million for the year and a fourth quarter net loss of $320 million, despite record revenue and profit from the company’s APL Logistics unit.
APL’s liner shipping operations posted a core EBIT loss of $446 million for the year as volume fell 5 percent to $7.9 billion. Volume rose 5 percent to 2.98 million 40-foot-equivalent units but average revenue per FEU plunged 10 percent to $2,500.
Losses accelerated in the fourth quarter, when average revenue per FEU dropped 15 percent to $2,342 and APL posted a core EBIT loss of $297 million, compared with core EBIT of $178 million a year earlier. Revenue fell 16 percent to $2 billion.
“The performance of container shipping is disappointing,” said Ng Yat Chung, NOL’s chief executive. “Overcapacity and higher fuel costs have negatively affected the whole container shipping industry. We are urgently addressing costs and all other factors under our control to improve our performance.”
APL President Kenneth Glenn said that while freight rates fell, bunker prices rose. “We must continue to drive down costs and make better cargo selection decisions in the face of this industry-wide trend,” he said.
APL Logistics posted core EBIT of $69 million for the year, up 6 percent. Revenue rose 12 percent to $1.4 billion. Both core EBIT and revenue were records for the company, which cited growth in auto logistics and a strong first half in international logistics.
Fourth quarter core EBIT was unchanged at $20 million while revenue rose 3 percent to $390 million.