Cost-cutting efforts helped container shipping firm Neptune Orient Lines (NOL) narrow fourth-quarter losses despite the downturn in the industry.
The group posted a net loss of US$75.5 million (S$106 million) for the three months to Dec 25 last year, marking an 11 per cent improvement over the net loss of US$85.1 million in the same period the year before.
Revenue sank 28 per cent to US$1.28 billion, due mainly to a "decrease in liner revenue from void sailings, weak container trade demand and challenging freight rate environment", it reported yesterday.
NOL made a turnaround for the year with a net profit of US$707.2 million, well up on the US$259.8 million net loss before, thanks to a one-time gain of US$888 million from the sale of its logistics unit.
Revenue in the 12 months fell 23 per cent to US$5.38 billion.
NOL noted that during the quarter, APL - the brand under which its ships operate - saw revenue slide 29 per cent to US$1.28 billion. Average freight rates fell 22 per cent amid pressure from industry overcapacity, while volume slid 12 per cent on a reduction in back-haul volumes out of the United States and the Gulf.
AT A GLANCE
NET LOSS: US$75.5 million (2014: US$85.1 million)
REVENUE: US$1.28 billion (2014: US$2.23 billion)
But APL also achieved savings of US$100 million as a result of its "rigorous cost management, as well as a yield-focused trade strategy that emphasised network rationalisation and better cargo selection", bringing its full-year cost savings to US$435 million.
Losses per share from continuing operations for the quarter came in at 8.5 US cents, compared with 14.47 US cents before. Net asset value per share surged 41.8 per cent to 0.95 US cent as at Dec 25, up on the 0.67 US cent as at Dec 26, 2014.
No dividends were declared for the 2015 financial year "in view of the continued operating losses of the group and the weakness of the container shipping industry".
In a tele-conference yesterday, NOL group president and chief executive Ng Yat Chung said the quarter had been "particularly difficult" for the liner industry as a whole.
Challenges include the still- mounting pressure from excess capacity, the lacklustre global economy and ultra-low bunker prices, which pushed freight rates to "historic lows" in many trade lanes.
He noted that the drop in volume and rates more than offset cost savings and yield improvements during the quarter. "The results are, of course, disappointing, but we note that the trend of losses continues to reduce in spite of steadily worsening conditions in the industry."
Mr Ng said NOL, which is being bought out by French shipping giant CMA CGM for $3.38 billion or $1.30 per share, has made all necessary anti-trust filings.
The offer is subject to anti-trust clearances from the European Union, China and the US.
"So far, we've not encountered any difficulty and we continue to expect that the approvals will come sometime in the middle of 2016."
NOL shares closed half a cent or 0.4 per cent up at $1.25 yesterday, before the results were released.