NOL first half loss hits $391 million

NOL first half loss hits $391 million    Singapore-based NOL lost $391 million in the first half of 2009, a huge drop from the $196 million the company made in the corresponding period in 2008.
   NOL, the parent of liner carrier APL, also saw revenue fall 37 percent to $2.9 billion in the first half, while income from continuing operations cratered to a loss of $350 million after a profit of $229 million in the first half of 2008. Container volume fell 24 percent in the first half to 1.94 million TEUs, though the volume drop in the second quarter (19 percent) was less pronounced.
   The carrier said intra-Asia volume took up 39 percent of total volume in the second quarter, up from 34 percent in the same period in 2008. Revenue from container shipping in the second quarter sank 39 percent to $1.2 billion.
   Operating profit from the company’s logistics unit fell 20 percent to $24 million, while profit from the terminals division fell 77 percent to $7 million.
   'In the first half of 2009, NOL's performance continued to be impacted by the global economic recession,' said NOL Group Chairman, Cheng Wai Keung. 'Through ongoing business adjustments we have strengthened our position to deal with the challenging marketplace. A key initiative was a major share rights issue. This initiative has taken the group's pro forma net gearing close to zero. The group's enhanced financial flexibility arising from a stronger balance sheet will provide an important source of differentiation in the current credit-constrained environment.'
   The rights issue in June netted the company nearly $1 billion. Like most other carriers, APL has struggled through an intense slump in demand for containerized goods. In response, the carrier has idled about a quarter of its fleet capacity to improve utilization. Reuters reported that the company said it had no plans to put any of the 15 ships is has idled back into service

Widdows

   'Although volumes and operating performance improved in the latter months of the first half, business conditions remained depressed, and this continued to impact our financial performance,' said Ron Widdows, NOL Group president and chief executive officer. 'We continued to adjust our business to these tough conditions ' with measures taken to rationalize our network, equipment, terminal handling and land transport expenses and reduce general and administrative costs — while maintaining high service levels.'
   For the second half of 2008, NOL is expecting more tough times.
   'NOL anticipates a continuation of adverse business operating conditions,' the company said in its future outlook. 'This is notwithstanding the cost saving measures that have been undertaken. NOL reiterates that it expects to post a significant full year loss. The group will continue to focus on improving asset utilization, yields and productivity.'
   If, as expected, the company does post a year-end loss, it would be the first time since 2002.