NOL Group reports USD 67 million loss in first half

Neptune Orient Lines (NOL) reported a net loss of USD 67 million for the first half of 2011 compared to a USD 1 million net profit in the same period a year ago. The Group said it lost USD 57 million in the second quarter of 2011.

NOL reported a 9% revenue increase in the first half of 2011 to USD 4.595 billion. It announced a Core EBIT loss of USD 28 million.

The Group said first half 2011 results were affected by higher operating costs, especially for fuel, and declining freight rates. It added that its supply chain management business, APL Logistics, increased revenue and Core EBIT.

“Conditions are challenging throughout the shipping industry,” said NOL Group CEO Ronald D. Widdows. “In this environment we are working aggressively to bring down costs while keeping our assets well utilized.”

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NOL’s Liner Shipping business - APL - reported revenue of USD 4 billion in the first half of 2011. That was up 7% from a year ago. Volume increased 8%. Revenue per FEU declined 3%, mainly due to lower freight rates in the Asia-Europe Trade. Vessel utilization in the first and second quarters of 2011 was 92% and 91% respectively.

“Rate pressure, coupled with a 23% year-on-year fuel price increase in the first half of 2011, negated the benefit of higher volume,” said APL President Kenneth Glenn. “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% in the first half of 2011 to USD 682 million. Core EBIT increased 22% from 2010 to USD 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 APL Logistics President Jim McAdam. “We are encouraged by the increasing contribution of emerging markets, particularly in China, to our first-half performance." <Korea Shipping Gazette>