August 5, 2010
NOL swings into profit
Singapore headquartered container shipping giant Neptune Orient Lines (NOL) reports a net profit of US$100 million for the second quarter of 2010. That compares with a net loss of US$146 million in the second quarter of 2009.
Core EBIT (Earnings Before Interest and Taxes) for the quarter was $114 million compared to a Core EBIT loss of $131 million in the same quarter a year ago. Second quarter 2010 revenue increased 53 percent to $2.1 billion.
"Continued strong container shipping volumes and improving freight rates have helped return us to profitability," said Group President and CEO Ronald D. Widdows. "The result for this latest quarter reflects significant progress as we turn around our performance from the economic downturn of 2009."
NOL reported core EBIT of $40 million for the first half of 2010, compared to a $353 million core EBIT loss a year ago. Revenue in the first half increased 44 percent to $4.2 billion. Net profit for the first half of 2010 was $1 million, compared to a net loss of $391 million in the first half of 2009.
Though the Group said it will not pay an interim dividend to shareholders, it will consider a final dividend to be paid based on its current policy of paying an annual dividend of 20 percent of net profits after tax.
As previously announced, NOL is presenting the financial results of Container Shipping and Terminals as one business unit, namely Liner.
APL, NOL's liner shipping business, reported first half 2010 revenue of $3.7 billion, up 46 percent from $2.5 billion a year ago. Volume in the first half increased 39 percent to 1.35 million FEUs (forty-foot equivalent units). Core EBIT for the first half was $13 million, up from a core EBIT loss of $372 million a year ago.
"Vessels were effectively full during much of the first half of 2010 even though we reintroduced idled vessels to our network and added incremental capacity," said APL President Eng Aik Meng. "In the second half, we will continue to emphasize operational efficiency and service reliability to meet the needs of our customers."
APL Logistics, NOL Group's supply chain management business, reported core EBIT of $27 million in the first half of 2010, up 13 percent from 2009. Revenue increased 33 percent to $578 million. The improvement was attributed primarily to increased volume across various business lines, higher rates in the freight forwarding business and growth in the auto logistics sector.
"We are particularly encouraged that average weekly revenue in the second quarter of 2010 was the highest it has been since late 2008," said APL Logistics President Jim McAdam.
With further improvement anticipated in container shipping volume and rates, NOL Group expects significant improvement in third quarter profits.
Download NOL's second quarter presentation HERE