Home » Maritime » NOL reports $67 million loss in first half of 2011

Neptune Orient Lines (NOL) has reported a net loss of US$67 million for the first half of 2011, after registering a $1 million in net profit in the same period a year ago.

NOL said that unless the weakened trade demand improves and continued pressure on freight rates eases, the company will post a full-year loss.

The company saw a 9 percent revenue increase in the first half of 2011 to $4.595 billion and a loss in core earnings before interest and taxes of US$28 million.

First-half 2011 results were affected by higher operating costs, especially for fuel, and declining freight rates.

“Conditions are challenging throughout the shipping industry,” said Ronald Widdows, NOL’s chief executive officer. “In this environment we are working aggressively to bring down costs while keeping our assets well utilized.”

APL, the company’s liner shipping business, reported a revenue of $4 billion in the first half of 2011, up 7 percent from a year ago. Volume increased 8 percent.

Revenue per FEU (40-foot equivalent unit) declined 3 percent, mainly due to lower freight rates in the Asia-Europe trade. Vessel utilization in the first and second quarters of 2011 was 92 percent and 91 percent, respectively.

“Rate pressure, coupled with a 23 percent year-on-year fuel price increase in the first half of 2011, negated the benefit of higher volume,” said Kenneth Glenn, APL president. “Our job now is to accelerate revenue growth while managing down costs in every aspect of our business, from terminal operations to the way we procure all other services.”

APL Logistics, NOL’s supply chain management business, increased revenue 18 percent in the first half of 2011 to $682 million. Core EBIT increased 22 percent from 2010 to $33 million. The increases were attributed primarily to gains in contract logistics, which includes rail and land transport business as well as auto logistics, and international services.

“Increased volume in most of our business lines is driving revenue higher,” said Jim McAdam, APL Logistics president. “We are encouraged by the increasing contribution of emerging markets, particularly in China, to our first-half performance.”

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