NOL Posts Net Loss for Second Quarter

NOL Posts Net Loss for Second Quarter

Neptune Orient Lines Group reported a net loss of $35 million in the second quarter of 2013, compared with a net loss of $118 million in the second quarter of 2012.

Quarterly revenue was $2.06 billion, falling 12 percent from $2.33 billion in the same quarter in the previous year. Revenue from the container shipping business, APL, was $1.73 billion, down 13 percent year-over-year, and revenue from the supply chain management business, APL Logistics, was $354 million, dropping 2 percent.

“Market conditions have worsened in the second quarter of this year compared to a year before,” said Ng Yat Chung, NOL Group’s CEO, in a written statement. “The group’s results demonstrate that we are on target in our strategy to deliver a better performance through cost management.”

In the first six months of 2013, NOL Group posted a profit of $41 million, including a $200 million gain from the completed sale of the NOL headquarters building in Singapore, compared with a net loss of $371 million in the first half of last year. From January to June, total revenue dropped 6 percent from $4.71 billion in 2012 to $4.44 billion in 2013. Revenue from APL dropped 8 percent to $3.70 billion, while revenue from APL Logistics rose 4 percent to $781 million.

“While we were adversely impacted in the second quarter by an unseasonal slowdown in our automotive segment, all our other lines of business have grown on a year-on-year basis,” said Jim McAdam, APL Logistics president. “We are also pleased to see that our growth strategy in the emerging markets is being realized.”

In the first half of the year, APL’s average revenue per 40-foot-equivalent unit declined 7 percent year-over-year, while efficiency improvements helped reduce the cost of sales per FEU by 8 percent, according to the NOL Group.

“Weak demand coupled with an oversupply situation in the industry has continued to put severe pressure on freight rates,” said Kenneth Glenn, APL’s president. “We expect that the realization of our fleet renewal program will further make significant improvements to our cost base.”

NOL Group noted that it remains on track to deliver a better performance in 2013 than in 2012.