APL, the container shipping division of Neptune Orient Lines (NOL), reported second quarter core EBIT (earnings before interest and taxes) of US$7 million compared with a $53 million loss a year earlier.
Singapore-based NOL in a press statement said this is the first time since the fourth quarter of 2010 that its shipping business has been profitable. It attributed the result to higher freight rates, volume growth, and efforts to control expenses and improve efficiency.
APL’s second quarter revenue was $2 billion, up 7 percent from a year ago.
NOL reported a group-wide core EBIT in the second quarter of $16 million from a loss of $41 million for the same period a year ago.
The company said one-time charges of $112 million for organizational restructuring and obsolete vessels held for sale led to a second quarter net loss of $118 million.
Without the non-recurring charges, second quarter net loss would have been US$6 million.
“The one-time charges were difficult but necessary,” said group CEO Ng Yat Chung. “We need a more efficient organization and a more modern, cost-competitive fleet to deal with the oversupply situation in the container shipping industry.”
NOL reported an 8 percent revenue increase in the second quarter year-over-year. The company said that through two quarters of 2012 it has achieved $225 million in expense reductions toward a full-year goal of $500 million.
Improved fuel efficiency accounted for much of the cost savings, the company said.
APL Logistics, NOL’s supply chain division, reported core EBIT of $9 million in the second quarter, down 25 percent from a year ago owing partly to investments in technology products and commercial infrastructure.
The segment reported second quarter revenue of $361 million, up 15 percent from the same period in 2011.
Despite the improved performance, the group sees the outlook for the rest of the year as uncertain, hinging on freight rates, the global economy, the over-capacity in container shipping, and fuel prices.
Photo courtesy of NOL
