NOL ships in losses owing to severe port congestion in United States

SINGAPORE - NOL Group today reported a third quarter net loss of US$23.1 million (S$28.8 million), reversing from a profit of US$20 million in the same period last year.

Revenue for the three months to Sept 19 was flat at US$2.06 billion.

Loss per share amounted to 0.89 US cent, against earnings of 0.77 US cent previously while net asset value per share fell to 73 US cents compared to 80 US cents as at Dec 27.

Despite the group making losses, tax expense was incurred mainly due to certain entities in the group generating tax assessable income in the jurisdictions in which they operate.

NOL said that its cost management and efficiency drive has delivered US$290 million of cost savings year-to-date.

The savings were primarily achieved through a more efficient fleet and network optimisation but were largely offset by lower rates, lower volumes and increased costs from Southern California port congestion.

APL, NOL's container shipping business, reported third quarter core operating profit of US$6 million, up from US$3 million in the same period last year.

APL registered lower revenue for the quarter at US$1.7 billion, a year-on-year dip of 2 per cent due to freight rate pressures and lower cargo volumes.

APL said volumes were partly impacted by port congestion issues in Southern California, which has also caused a significant increase in operating costs.

"Our focus on increasing operational efficiencies remains on track," said NOL group chief executive Ng Yat Chung.

"However, our liner business faced tough operating conditions in the second and third quarters due to severe port congestion in Southern California, and this has negatively impacted our financial performance."

NOL's supply chain management business, APL Logistics, recorded third quarter revenue of US$399 million, an increase of 8 per cent.

It recorded third quarter core operating profit of US$15 million.

"APL Logistics continued its steady performance year-on-year as a result of growth in key emerging markets," said APL Logistics president Beat Simon.

"We remain focused on growing our business in key industry verticals and high-growth markets."