[031114.EN.SEA] NOL Blames US$23 Million Quarterly Loss in on LA-Long Beach Congestion

SINGAPORE's Neptune Orient Lines, parent of container shipping giant APL, posted a third quarter US$23 million net loss, drawn from flat revenues of $2.06 billion year on year.

"Our liner business faced tough operating conditions due to severe port congestion in southern California. This has negatively impacted our financial performance," said NOL Group CEO Ng Yat Chung.

APLs revenue for the period declined two per cent year on year to $1.69 billion, while average revenue per FEU fell one per cent to $2,343 per FEU liftings of 646,000 FEU, down three per cent.

Poor performance was partly blamed on the one per cent increase in the cost of sales, “mainly due to a spike in North American operating costs".

NOL also took a $42 million loss from increased finance costs attributed to exchange rate losses incurred from the repayment of a Singapore dollar loan.

Of APL's troubles waiting for berths in the face LA-Long Beach port congestion, APL president Kenneth Glenn said: "Given APL's significant business presence in southern California, we are working to urgently address these issues. This includes working with our partners on equipment and productivity challenges."

On the bright side, APL Logistics achieved eight per cent year-on-year quarterly revenue growth, which bodes well for its expected sale for what NOL hopes to be $1 billion in cash.

Last month, Korea's biggest logistics company CJ Korea Express Corp, said it was considering the purchase of APL Logistics. In a regulatory filing its revealed it was weighing opportunities related to APL Logistics including merger or partnership.

Source : HKSG.