NOL widens third-quarter losses by 84 per cent to US$96 million

SINGAPORE - Muted global demand and lower freight rates has pushed Neptune Orient Lines deeper into the red, with a net loss of US$96.1 million (S$134.85 million) for the third quarter.

The shipping firm announced on Friday that its net loss from continuing operations for the three months to Sept 30 surged by a staggering 84 per cent, up on the US$52.3 million from the same period last year.

Revenue sank 28 per cent to US$1.21 billion, mainly due to a decrease in liner revenue from void sailings, absence of peak summer season, weak container trade demand and the challenging freight rate environment, said NOL.

For the nine months, the group logged a net loss of US$143.2 million, a 43 per cent improvement over the net loss of US$252.1 million previously. Revenue, however, fell 22 per cent to US$4.11 billion.

NOL said its cost savings programme yielded US$80 million in the quarter, bringing its total year-to-date cost savings to US$335 million.

"The absence of the traditional third quarter peak season in Europe and North America led to severe freight rates erosion in major trade lanes. We continued to make good progress in managing costs. Unfortunately, this was more than offset by weak global demand and huge contraction in freight rates," said NOL group president and chief executive Ng Yat Chung.

"NOL will continue to drive cost excellence and yield optimisation. The group's balance sheet has strengthened and we will invest when the conditions are right."

The group suffered a loss per share of 3.7 US cents for the quarter, more than the loss per share of 2.02 US cents previously.

Net asset value per share was up 44.8 per cent to 97 US cents as at Sep 18 this year, compared with the 67 US cents as at Dec 26 last year.

The stock was flat on Friday at 99.5 cents, before the results were released.