APL suffers $61 million first half loss
Liner carrier APL sustained $61 million in operating losses in the first half of 2011, including $53 million in the second quarter, as it struggled to cope with rising fuel costs and lower freight rates, parent company NOL said in its interim financial statement Friday.
The line earned $13 million in the corresponding period in 2010.
The Singapore-based NOL Group suffered a $28 million operating loss, despite a 9 percent increase in revenue to $4.6 billion. APL revenue grew 7 percent in the first half to $4 billion, as volume increased 8 percent to 3 million TEUs.
But revenue per TEU declined 3 percent in the first half to $1,285, mainly due to deteriorating freight rates from Asia to Europe.
Volume fell 4 percent in the transpacific trade to 840,000 TEUs, and rose 17 percent in the Asia/Europe trade to 416,000 TEUs. The line said its vessel utilization was 91 percent in the first half, but stressed it needed to reduce operating costs while maximizing its assets.
'Rate pressure, coupled with a 23 percent year-on-year fuel price increase in the first half of 2011, negated the benefit of higher volume,' APL President Kenneth Glenn said. 'Our job now is to accelerate revenue growth while managing down costs in every aspect of our business; from terminal operations to the way we procure all other services.'
APL did secure a 4 percent first half increase in average revenue per TEU on the transpacific and Latin American trades to $1,908. Average revenue per TEU on the Asia/Europe and transatlantic trades fell 12 percent to $1,349.
NOL Chairman and Chief Executive Officer Ron Widdows also said costs were an issue, aside from declining freight rates from Asia to Europe.
'Conditions are challenging throughout the shipping industry,' he said. 'In this environment we are working aggressively to bring down costs while keeping our assets well utilized.'
A bright spot was an improved first half performance by APL Logistics, which increased operating profits 22 percent, to $33 million, on 18 percent higher revenue, at $682 million.
'Increased volume in most of our business lines is driving revenue higher,' said APL Logistics President Jim McAdam. 'We are encouraged by the increasing contribution of emerging markets, particularly in China, to our first-half performance.”
NOL is forecasting a full year loss in 2011 unless conditions improve, the company said.