Home » Breaking News, Maritime » NOL reports $20-M profit in 3Q amid weak peak season

Singapore-based Neptune Orient Lines managed to post net profits of US$20 million for the third quarter of 2013 despite a weak peak season.

The company’s earnings for the quarter are down from the $50 million recorded in the third quarter of 2012.

Year-to-date net profits amounted to $61 million, compared to a loss of $321 million for the the same period in 2012.

The group’s two operating companies, APL and APL Logistics, both posted higher core EBIT for their year-to-date performances in 2013 compared to the same period in 2012, a result of continuing focus on operational efficiency and cost management, NOL said.

The group’s core EBIT in the third quarter of 2013 was $22 million, compared to $80 million in the same quarter a year ago. Year-to-date core EBIT improved by 33 percent, or $42 million, from a $127 million deficit in the same period last year.

“This is one of the weakest peak seasons we have seen in recent years, characterized by depressed freight rates and industry over-capacity,” said NOL CEO Ng Yat Chung. “Nevertheless, our business units delivered encouraging results. Our focus on operational efficiencies is putting us in good stead for the long term.”

APL, NOL’s container shipping business, reported a 2013 year-to-date core EBIT improvement of 23 percent from a $168 million deficit in the same three quarters of 2012. Its third quarter core EBIT stood at $3 million, a downgrade from $61 million year-over-year. Third quarter revenue registered at $1.7 billion, sliding 13 percent from last year due to capacity management and a steep decline in freight rates.

“We are taking decisive actions to trim capacity and reconfigure our service networks to better align to the lower demand levels,” said APL president Kenneth Glenn. “We believe that our improved cost structure will position us well in a low growth and volatile freight rate environment.”

NOL’s supply chain management business, APL Logistics, maintained its third quarter core EBIT at $19 million. Year-to-date core EBIT rose 10 percent over the same three quarters of 2012, aided by business expansion coupled with operating efficiency and productivity growth. A 3 percent year-to-date improvement in revenue to $1.2 billion was reported compared to last year.

“We will continue to drive profitability by focusing on cost and service delivery to our customers,” said APL logistics president Jim McAdam. “APL Logistics’ business expansion in the emerging markets remains firmly on track, and our recent acquisitions in the U.S. and China are contributing to our earnings.”

NOL said it “remains on track to deliver a better performance than in 2012,” even as it noted that general market conditions have not improved and that volatile freight rates and over-capacity will continue.

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