NOL reports Q1 loss on weak freight rates

   NOL Group, the parent company of the container shipping company APL and APL Logistics, said it had a loss of $98 million in the first quarter, compared to a profit of $76 million in the same 2013 period. Last year’s first quarter results had benefited from a $200-million gain from the sale of the NOL headquarters building in Singapore.
   Core before-tax earnings were $33 million in the first quarter this year, compared to $5 million in the first quarter of 2013. NOL attributed the improvement in EBITDA to its continuing focus on cost management and operational efficiency, which it said delivered $80 million worth of cost savings in the first three months of 2014.
   Revenue was $2.28 billion in the first quarter, 4-percent lower than the $2.37 billion recorded in the first quarter of 2013.
   NOL Group President and Chief Executive Officer Ng Yat Chung said, “Going forward, global economic prospects and trading conditions remain uncertain. Oversupply of shipping capacity will continue to exert pressure on liner freight rates. The group aims to improve its financial performance in 2014, through its continued focus on cost discipline and drive for operational efficiency. We will also seek growth opportunities, particularly in our logistics business.”
   APL moved 785,000 40-foot equivalent units in the first quarter, 2-percent more than in the same 2013 period. Liner revenue, however, fell 5 percent to $1.88 billion, reflecting a 6-percent drop in average container rates to $2,233 per FEU.
   “APL’s emphasis on capacity management, as well as savings in areas such as bunker consumption and vessel and voyage operations, helped cushion the impact of falling freight rates in this year’s first quarter,” said APL President Kenneth Glenn. “As more of our newbuildings come on stream in the following months, along with the scheduled return of less efficient chartered tonnage, we are on track to continue lowering slot costs and further strengthen our competitiveness.”
   APL said its headhaul utilization “was at an optimal 95 percent in the first quarter of 2014. APL registered a 9-percent volume expansion with stable freight rates in the Asia-Europe trade. Volume was firm in the transpacific trade, with freight rates falling 5 percent, while its Intra-Asia trade grew 1 percent in volume against an 11-percent dip in freight rates, amidst intense market competition and excess tonnage cascading from the Asia-Europe trade.”
   APL Logistics’ revenue was $423 million in the first quarter of this year, off 1 percent from the first quarter of 2013. EBITDA was $21 million in the first quarter, 11-percent higher than it was a year earlier.
   “The first quarter performances of our core international logistics and contract logistics businesses had been satisfactory, and we are progressing steadily on our growth trajectory,” said APL Logistics President Beat Simon. “While our automotive logistics services are still feeling some impact from the ongoing automotive plant shutdown in North America, our growth strategy in the emerging markets has continued to propel our business. We remain focused on realizing growth opportunities in selected verticals and attractive markets.”