[210811.EN.SEA] NOL Posts Second Quarter Loss Of US$57 Million On 1pc Revenue Increase

SINGAPORE's Neptune Orient Lines (NOL) - 66 per cent owned by state investment company Temasek - posted a net loss of US$57 million in the second quarter compared with $100 million net profit in the same period in 2010, accumulating into a half year loss of $67 million.

With the results, came news that NOL's container arm APL plans to introduce a peak season surcharge August 15, though no details were provided, reported MarketWatch.

"Deteriorating conditions in the global economy are resulting in weakened trade demand and continued pressure on freight rates," the company said in a statement to Singapore Exchange.

But NOL, parent of APL, the world's seven biggest container line, increased sales and volume. Half-year sales rose nine per cent to $4.6 billion and volume went up eight per cent to 1.46 FEU, reported London's Containerisation International. Revenue was up one per cent to $2.15 billion year on year from US$2.12 billion in the same quarter last year.APL president Kenneth Glenn.

"Rate pressure, coupled with a 23 per cent year-on-year fuel price increase in the first half of 2011, negated the benefit of higher volume," said 

But the company said rates may have bottomed, and it expects peak season volumes to return, but later on in the year, and note quite as early in the third quarter.

"The decline in container rates has levelled off and we expect slight gains in the third quarter," said Mr Glenn.
NOL said the negative growth in first half was caused by increasing cost of operations, in particular, high bunker prices and low freight rates. So the average revenue per FEU dropped by three per cent to $2,570.

Said NOL chief executive Ron Widdows: "Conditions are challenging throughout the shipping industry. In this environment we are working aggressively to bring down costs while keeping our assets well utilised."

Source : HKSG.