NOL, parent of APL, reports smaller Q1 loss

Revenues from ocean carrier APL decreased as the company eliminated unprofitable capacity, according to NOL’s most recent financial statements.    NOL Group, the Singapore-based parent of the ocean carrier APL, reported a net loss of $11 million in the first quarter of 2015 compared with a $98 million loss in the same 2014 period.
   Revenues at the company totaled $1.985 billion in the first quarter this year, down 13 percent from $2.279 billion in the first quarter of 2014.
   “The Group’s container shipping business continued to operate in a challenging environment,” said Ng Yat Chung, NOL group president and chief executive. “Nonetheless, APL has reduced its losses through capacity management, and improved cost and operational efficiencies.”
   “While congestion in the US West Coast is easing, the liner industry continues to face persistent over-capacity and uncertain global economic prospects,” he added.
   Liner company APL reported a positive first quarter 2015 core earnings before interest and taxes (EBIT) of $13 million, compared to a loss of $82 million over the same period last year.
   First quarter revenues for APL were down 15 percent to $1.6 billion compared to the $1.89 billion recorded in the first quarter of 2014.
   The company said revenues fell “mainly due to planned capacity cuts in unprofitable trade routes and the impact from the US West Coast port congestion.”  APL’s average freight rates dipped 8 percent to $2,063 per FEU when compared with the average of $2,233 per FEU in the same quarter last year. Cost of sales per unit fell 8 percent year-over-year.
   “APL eliminated unprofitable capacity for better yield in the first quarter of 2015. We extracted cost savings from lower bunker cost and through more efficient land and terminal operations as well as vessel and voyage operations. These efforts help mitigated the impact of lower volumes and freight rates that we saw in the first quarter,” said APL President Kenneth Glenn. “We shall further optimize yield through capacity management, network design and cargo selection. Network design will help to reduce complexity in our business, lower slot cost and improve reliability; and better cargo selection will improve roundtrip profitability in our key trades.”
   NOL’s supply chain management business, APL Logistics’ year-over-year core EBIT and revenues remained stable at $17 million and $406 million, respectively, despite what the company called “headwinds from a strong US dollar.”
   NOL announced the proposed divestment of APL Logistics to Kintetsu World Express, Inc. on February 17 and on April 15 NOL shareholders approved the sale. Subject to regulatory approval, the transaction is expected to be completed by mid-2015.