NOL Group announced a net loss of US$91 million for the third quarter of 2011 compared to a profit of $282 million in the same period last year.
The Singapore-based firm said its container shipping business incurred losses in line with “an industry-wide trend,” while its logistics business reported higher revenue and a 9 percent year-to-date gain in earnings before interest and taxes (EBIT).
“The liner shipping industry is faced with slowing trade demand, excess capacity and fuel costs that are significantly higher than a year ago,” said Ng Yat Chung, NOL Group CEO. “Our urgent priority is to drive down costs and increase efficiency.”
NOL reported third-quarter 2011 revenue of $2.2 billion, down 9 percent from a year ago. It announced a loss in EBIT for the period of $72 million. Through three quarters of 2011, NOL has a net loss of $158 million.
APL, NOL Group’s liner shipping business, reported increased volume of 7 percent in the third quarter of 2011. Revenue declined 12 percent and EBIT loss amounted to $88 million. Revenue per FEU (40-foot equivalent unit) was 19 percent lower in the third quarter of 2011 compared to the same period in 2010. Fuel prices increased 45 percent in the third quarter from the same period a year ago.
“Higher volume was offset by increased fuel cost and lower freight rates,” said Kenneth Glenn, APL president. “In this environment, we must continue to concentrate on operational efficiency and managing costs down.”
APL Logistics, NOL’s supply chain management business, reported third-quarter revenue of $333 million, up 10 percent from a year ago. Third-quarter EBIT was $16 million, down 11 percent from a year ago. Year-to-date in 2011, APL Logistics has reported revenue of $1 billion, up 15 percent from 2010.
“We achieved our highest average weekly revenue ever during the third quarter and we continue to invest for growth,” said Jim McAdam, APL Logistics president. “But at the same time, we are actively managing costs as a reflection of uncertain economic conditions.”
On its outlook for the year, NOL Group said: “Global economic conditions have not improved. With continued low freight rates in container shipping and slowing trade demand, NOL Group expects to report a loss for the full year in 2011.”
