NOL 'disappointed' by $478 million loss
February 22, 2012
The loss by NOL Group of US$478 million – most of it attributed to its APL container line – has been described by the company’s chief executive as “disappointing”.
Reporting its 2011 results today, Singapore-based NOL has suffered a collapse in profitability after a reasonably healthy 2010, when the group made a net profit of $461 million.
The company said unsettled economic conditions, high fuel costs and lower freight rates had impacted the 2011 results, adding that while volumes had risen by 5%, prices had fallen by 10% and bunker fuel costs had risen by a third.
“The performance of container shipping is disappointing,” said CEO Ng Yat Chung.
“Overcapacity and higher fuel costs have negatively affected the whole container shipping industry. We are urgently addressing costs and all other factors under our control to improve our performance.”
NOL said overall 2011 revenue decreased 2% to $9.2 billion while the group reported a core loss, before interest and taxes, of $377 million for the year. Much of that fell in the fourth quarter.
APL, the group’s container line business, reported 2011 revenue of $7.9 billion, down 5% from 2010, and a loss of $446 million, despite a 5% year-on-year volume increase.
“The volume increase was offset by downward pressure on freight rates and high fuel costs,” said APL President Kenneth Glenn.
“We must continue to drive-down costs and make better cargo selection decisions in the face of this industry-wide trend.”
On a somewhat brighter note, NOL’s supply chain management business, APL Logistics, reported a record performance in revenue and earnings.
The division boasted revenue of $1.4 billion, up 12% from 2010 and core earnings before interest and tax of $69 million - both all-time highs for the business.
Divisional President Jim McAdam cited growth in auto logistics and a strong first half in international logistics as the main factors contributing to the results.
Courtesy of IFW
