The liner carrier APL lost $246 million from continuing operations in the first quarter, a massive drop from the $8 million it lost in the corresponding period in 2011, Singapore-based parent company NOL said Wednesday.
APL saw revenue drop 4 percent year-on-year in the first quarter to $2 billion, while container volume increased 4 percent to 791,000 TEUs.
Average revenue per TEU fell 7 percent to $2,420, while average bunker prices in the quarter rose 31 percent to $684 per metric ton.
APL had operating losses of $446 million in 2011, and has lost $543 million in the last two quarters. It hasn’t had a profitable quarter since the fourth quarter of 2010.
“Rates have been moving up since March, but not yet enough to offset the high cost of fuel,” said APL President Kenneth Glenn. “Much more remains to be done to increase rates and manage down expenses.”
APL Logistics fared better in the first quarter, pocketing $13 million in operating profits in the first quarter. However, that was a 38-percent drop from the same period in 2011. Revenue increased 7 percent to $394 million.
NOL saw first quarter operating losses of $233 million, and a net loss of $254 million on revenue of $2.4 million (down 3 percent from the first quarter of 2011).
“There were positive signs in the first quarter – the freight rate increases in March and growth in the Logistics business,” said NOL Group Chief Executive Officer Ng Yat Chung. “But we must continue to aggressively manage our operating costs, and streamline our organisation for greater efficiency.”
NOL said in the first quarter of 2012 it achieved about $100 million of cost savings and is on track to achieve $500 million worth of savings for 2012. The savings were primarily through reduced fuel consumption and improved operational costs.
NOL is also undertaking an organizational restructuring that will result in an additional annual savings of about $70 million from 2013 onwards. The company said that its organization structure worldwide will be streamlined to shorten decision cycles and respond better to market changes and evolving customer needs. – Eric Johnson
APL loses $246 million in 1Q
