SINGAPORE's Neptune Orient Lines (NOL) posted a 60 per cent decline in third quarter net profit to US$20 million, drawn on revenues of $2.06 billion, down 10 per cent after a poor shipping season.
But operational efficiencies helped the company reverse itself from a year-to-date loss of $321 million in the first three quarters of 2012 to a net profit of $61 million in the first nine months of 2013.
The group posted a year-to-date core EBIT improvement of 33 per cent or $42 million from the $127 million loss it suffered in the same period last year.
Singapore-based NOL attributed the better showing to efficiency and cost management. Its two operating companies - APL and APL Logistics - both delivered better 2013 year-to-date performances in core EBIT compared to 2012.
"This is one of the weakest peak seasons we have seen in recent years, characterised by depressed freight rates and industry overcapacity," 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 $22 million, compared to a core EBIT of $80 million in the same quarter a year ago. Its net earnings of $20 million this quarter is down from the $50 million recorded in 3Q 2012.
"APL, NOL's container shipping business, reported a 2013 year-to-date core EBIT improvement of 23 per cent, compared to a $168 million deficit in the same three quarters in 2012.
Its third quarter 2013 core EBIT stood at $3 million. APL registered third quarter revenue of $1.7 billion, sliding 13 per cent from last year due to capacity management and a steep decline in freight rates, said the NOL statement.
"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," he said.
APL's headhaul utilisation stayed above 90 per cent in the first three quarters of 2013. Over the same period, APL's average revenue per FEU dropped seven per cent while operational efficiencies helped reduce cost of sales per FEU by seven per cent.
NOL's supply chain management business, APL Logistics, maintained its third quarter 2013 core EBIT at $19 million, with core EBIT margin staying steady at 5.1 per cent, compared to the same quarter last year.
APL Logistics' year-to-date core EBIT improved 10 per cent over the same three quarters of 2012, aided by business expansion coupled with operating efficiency and productivity growth. The business reported a three per cent year-to-date improvement in revenue to $1.2 billion compared to last year.
In the third quarter of 2013, International Logistics Services revenue improved eight per cent year on year to $143 million, driven by business expansion within emerging markets in Asia/Middle East.
International Logistics Services core EBIT stood at $12 million. Over the same period, APL Logistics' Contract Logistics business registered a slight two per cent drop in revenue to $228 million, with core EBIT at $7 million, largely due to an extended plant slowdown in the North American automotive segment.
"In a tough marketplace, APL Logistics has improved our overall margins. We will continue to drive profitability by focusing on cost and service delivery to our customers," said APL Logistics president Jim McAdam. "APL Logistics' business expansion in the emerging markets remains firmly on track, and our recent acquisitions in the US and China are contributing to our earnings."
WORLD SHIPPING
31 October 2013 - 21:34
Singapore's NOL reverses from loss with US$20 million net profit
SINGAPORE's Neptune Orient Lines (NOL) posted a 60 per cent decline in third quarter net profit to US$20 million, drawn on revenues of $2.06 billion, down 10 per cent after a poor shipping season.
WORLD SHIPPING
31 October 2013 - 21:34
Singapore's NOL reverses from loss with US$20 million net profit
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