Lower third quarter profits for Neptune Orient Lines

THIRD quarter net profit at Neptune Orient Lines (NOL) fell 60 per cent as lower freight rates and volume brought liner revenue down, the container shipping firm said on Wednesday.

Earnings for the three months to Sept 20 were US$19.99 million (S$25 million), from US$50.032 million in the same period last year.

Revenue fell 10 per cent to US$2.063 billion.

Earnings per share were 0.77 US cent, from 1.94 US cents in the same quarter a year ago. Net asset value per share was 84 US cents at Sept 20, from 83 US cents at Dec 28 last year.

For the nine months to Sept 20, NOL achieved net profit of US$60.88 million, reversing from a loss of US$321.39 million. This was due to the one time gain from the sale of NOL building in Alexandra Road.

The shipping firm had sold the 26-storey office tower to property company Fragrance Group and is leasing back the property.

When the effect of such one-off items are removed, NOL was still in the red for the three quarters. But its net operating losses fell to US$85 million, from US$127 million a year earlier.

The company said that this was due to continued efficiency and cost management efforts which helped it in a time of continued weak global economic conditions.

"This is one of the weakest peak seasons we have seen in recent years, characterised by depressed freight rates and industry over-capacity," said chief executive Ng Yat Chung in a statement.

"Nevertheless, our business units delivered encouraging results. We improved our operational performance significantly from last year." NOL's focus on operational efficiencies is putting it in good stead for the long term, said Mr Ng.