Singapore-based Neptune Orient Lines (NOL) announced a net loss of US$478 million in 2011, a big turnaround following net earnings of $461 million in 2010.
NOL said unsettled economic conditions, high fuel costs, and lower freight rates affected results.
“The performance of container shipping is disappointing,” said Ng Yat Chung, group CEO. “Over-capacity 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.”
The container shipping and logistics company said in a statement on Feb 22 that its 2011 revenue decreased 2 percent to $9.2 billion. It recorded a core earnings-before-interest-and-taxes (EBIT) loss of $377 million for the year, while the fourth quarter of 2011 posted a net loss of $320 million.
APL, the group’s liner shipping business, reported 2011 revenue of $7.9 billion, down 5 percent from 2010, and a core EBIT loss of $446 million. Volume increased 5 percent year-on-year. Average revenue per FEU (40-foot equivalent unit) was down 10 percent.
APL said the average price of bunker fuel was 33 percent higher in 2011. “The volume increase was offset by downward pressure on freight rates and high fuel costs,” said Kenneth Glenn, APL president. “We must continue to drive down costs and make better cargo selection decisions in the face of this industry-wide trend.”
NOL’s supply chain management business, APL Logistics, reported record performance in revenue and core EBIT.
APL Logistics reported 2011 revenue of $1.4 billion, up 12 percent from 2010, and a core EBIT of $69 million, both all-time highs for the business. Growth in auto logistics and a strong first half in international logistics contributed to the results.
“The diversity of our portfolio led to record high revenue and profitability,” said Jim McAdam, APL Logistics president. “We will continue to invest in our business infrastructure and logistics network to support business growth.”
On the economic outlook, NOL said that despite signs of improvement in recent freight rates, its financial performance will remain weak if prevailing conditions—global economic uncertainty, high fuel costs, and over-capacity in the container shipping industry—persist.
Photo courtesy of NOL Group
