[210513.EN.SEA] Singapore's NOL Narrows Quarterly Loss 64pc, But Oversupply Clouds Boxes

SINGAPORE's Neptune Oriental Lines (NOL) has posted first quarter loss of US$85, narrowing the shortfall 64 per cent from the previous year's loss of $148 million, drawn on revenues of $2.37 billion which remained flat year to year

The NOL Group, which owns the APL container shipping giant, attributed the improvement to a continuing cost cutting and efficiency, it being the fourth straight quarter of year-on-year improvements.

"The container shipping industry remains saddled with overcapacity. The group will continue its focus on cost efficiency, yield and capacity management. Barring unforeseen circumstances and if freight rates do not deteriorate, the group remains on track to deliver a better performance than in 2012," said the NOL statement accompanying the results.

"Our cost base has improved as we continue to build a more competitive NOL. We have improved operational performance considerably from one year ago, so we know we are on the right track," said NOL Group CEO Ng Yat Chung.

"But there is still more work to be done, especially when macro-economic conditions remain challenging, and the container shipping sector continues to face an oversupply situation."

APL reported first quarter 2013 revenue of $1.97 billion. Overall market demand continued to be frail, made worse by seasonal weakness and persistent overcapacity. Despite the prevailing challenges, APL registered an improved performance, with its Core EBIT loss at $101 million, compared to a $246 million deficit the same quarter last year, said the company statement.

Transpacific trade remained APL's main driver, with a four per cent year-on-year growth in volume backed by improving backhaul volumes. Intra-Asia trade stayed robust, while rate gains in the Asia-Europe trade were shortened by weak demand. APL's headhaul and backhaul utilisations were above 90 per cent across major trade lanes.

"The delivery of our new and more fuel-efficient vessels has helped us reduce our vessel slot costs," said APL president Kenneth Glenn. "We continue to reap benefits from fuel, operational and other cost efficiencies. "

APL Logistics continued its steady revenue and earnings growth, reporting first quarter revenue of $427 million, up eight per cent year on year. Its profit (EBIT) improved 27 per cent year on year to $16 million.

Source : HKSG.