NOL records $245 million loss
Neptune Orient Lines, parent company of container carrier APL, said it had a first quarter loss of $245 million compared to a profit of $121 million in the same 2008 period.
Revenue for the quarter was $1.54 billion, 36 percent less than $2.4 billion in same 2008 period.
The company said it was affected by “a significant decline in global trade flows and consequently liner shipping volumes. In addition, freight rates deteriorated across all major trade lanes.”
'During the first quarter, a range of significant business adjustments were undertaken to better align the group's overall network and cost structures with reduced market demand. Further cost saving initiatives have been set in motion and will be implemented as the year progresses,' said Ron Widdows, chairman and chief executive officer of NOL.
The company said it had $1.29 billion in revenue from container shipping in the first quarter, 36 percent less than in the first quarter of 2008. Globally it carried 481,000 40-foot equivalent units in the first quarter 27 percent fewer than in the same 2008 period. Average revenue per FEU decreased 16 percent year-on-year, and the company said this was primarily due to a combination of lower bunker recovery and freight rate pressures, particularly in the Asia/Europe and intra-Asia trade lanes.
In contrast to container shipping, which had an operating loss and negative core earnings before interest and taxes of $237 million, the company said both its logistics and terminals business units made positive core EBIT contributions for the quarter.
APL Logistics had revenue of $241 million and core EBIT of $14 million, 18 percent less than in the same 2008 period.
'Logistics recorded a substantial reduction in volumes and revenues for the quarter, reflecting global economic uncertainty and declining trade activity. Despite this, the logistics business improved its core EBIT margin to 5.8 percent through continued disciplined cost management and a focus on revenue quality,” Widdows said.
The company’s terminal business had first quarter revenue of $112 million, 23 percent below the same 2008 period. 'Our terminals activities were negatively impacted by the industry-wide decline in global container trade,' Widdows said. Core EBIT was $4 million, compared with $12 million in the same period of 2008.
For the rest of the year, NOL said it anticipates a continuation of adverse business operating conditions, and said it expects to post a significant full year loss.