NOL reports US$20 million third quarter profit

NOL Group recently reported net profits of US$20 million for the third quarter of 2013, and year-to-date net profits of US$61 million. The group posted year-to-date Core EBIT improvement of 33% or US$42 million, from a US$127 million deficit in the same period last year.
 
Singapore-based NOL attributed the better showing so far this year to its continuing focus on operational efficiency and cost management. Its two operating companies - APL and APL Logistics - both delivered better 2013 year-to-date performances at the Core EBIT level compared to the same period in 2012.
 
“This is one of the weakest peak seasons we have seen in recent years, characterized by depressed freight rates and industry over-capacity,” said NOL Group CEO Ng Yat Chung. “Nevertheless, our business units delivered encouraging results. We improved our operational performance significantly from last year. Our focus on operational efficiencies is putting us in good stead for the long term.”
 
The group’s Core EBIT in the third quarter of 2013 was US$22 million, compared to a Core EBIT of US$80 million in the same quarter a year ago. Its net earnings of US$20 million this quarter is down from the US$50 million recorded in 3Q 2012.
 
APL, NOL’s container shipping business, reported a 2013 year-to-date Core EBIT improvement of 23%, compared to a US$168 million deficit in the same three quarters in 2012. Its 3Q 2013 Core EBIT stood at US$3 million. APL registered third quarter revenue of US$1.7 billion, sliding 13% from last year due to capacity management and a steep decline in freight rates.
 
“We are taking decisive actions to trim capacity and reconfigure our service networks to better align to the lower demand levels,” said APL President Kenneth Glenn. “We continue to strengthen our competitiveness, evidenced by our ability to generate positive operating results despite a difficult market. We believe that our improved cost structure will position us well in a low growth and volatile freight rate environment.”
 
APL’s headhaul utilization stayed above 90% in the first three quarters of 2013. Over the same period, APL’s average revenue per FEU dropped 7%, while operational efficiencies helped reduce cost of sales per FEU by 7%.
 
NOL’s supply chain management business, APL Logistics, maintained its 3Q 2013 Core EBIT at US$19 million, with Core EBIT margin staying steady at 5.1%, compared to the same quarter last year. APL Logistics’ year-to-date Core EBIT improved 10% over the same three quarters of 2012, aided by business expansion coupled with operating efficiency and productivity growth. The business reported a 3% year-to-date improvement in revenue to US$1.2 billion compared to last year.
 
In the third quarter of 2013, International Logistics Services revenue improved 8% year-on-year to US$143 million, driven by business expansion within emerging markets in Asia/Middle East. International Logistics Services Core EBIT stood at US$12 million. Over the same period, APL Logistics’ Contract Logistics business registered a slight 2% drop in revenue to US$228 million, with Core EBIT at US$7 million, largely due to an extended plant slowdown in the North American automotive segment. < Korea Shipping Gazette >