NOL reduces Q1 net loss on cost savings, lower fuel cost

NOL reported a narrowing of net loss of US$11 million (S$14.6 million) in its first quarter ended April 3, thanks to cost savings of US$155 million and lower fuel cost. -- PHOTO: ST FILE
NOL reported a narrowing of net loss of US$11 million (S$14.6 million) in its first quarter ended April 3, thanks to cost savings of US$155 million and lower fuel cost. -- PHOTO: ST FILE

SINGAPORE - A decrease in liner revenue from planned capacity cuts, void sailings and challenging freight rate environment dealt a blow to first quarter earnings at Neptune Orient Lines (NOL).

NOL, however, was able to report a narrowing of net loss of US$11 million (S$14.6 million) in its first quarter ended April 3, thanks to cost savings of US$155 million and lower fuel cost.

In comparison, it turned in a net loss of US$98 million in the same period last year.

First quarter revenue fell 13 per cent to US$2 billion in the same period.

Revenue from container shipping arm APL fell 15 per cent to US$1.6 billion, due mainly to planned capacity cuts in unprofitable trade routes and the impact from the US West Coast port congestion. APL's average freight rates dipped 8% versus the same quarter last year.

Revenue from supply chain management arm APL Logistics held stable at US$406 million, despite a strong US dollar. More than 30 per cent of APL Logistics' business were transacted in non-US dollar currencies.

On Feb 17, NOL announced plans to divest its logistics business to Kintetsu World Express for an aggregate purchase price of US$1.2 billion. The transaction is expected to complete by mid-2015.

The results were announced after market close. NOL shares closed one cent lower at $1.105 on Thursday.