NOL posts Q3 net loss of US$23m

Singapore

NOL Group's dismal financial performance continued as it announced another loss-making quarter on Friday - marking the fourth straight quarter that the group was in the red.

The group reported a third-quarter 2014 net loss of US$23 million, compared to the US$20 million profit it made a year ago, as its container shipping business continued to weigh it down. The group announced loss per share of 0.89 US cent, compared to the earnings of 0.77 US cent per share it made last year.

For the three months ended Sept 19, NOL's revenue of US$2.06 billion was unchanged from last year's levels. APL, NOL's container shipping business, 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.

The silver lining for NOL in this set of earnings is that its process of cost-efficiency continues to reap dividends. Year-to-date, the group reported core Ebit (earnings before interest, taxes and non-recurring items) loss of US$59 million, a 31 per cent reduction from the same period last year.

Singapore-based NOL also 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. These savings were largely offset by lower rates, lower volumes and increased costs from Southern California port congestion. "Our focus on increasing operational efficiencies remains on track," said NOL Group CEO 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."

On the contrary, NOL's supply chain management business, APL Logistics, recorded third-quarter revenue of US$399 million, an increase of 8 per cent from a year ago. This was driven by broad-based and steady demand growth across all markets, particularly in the Asia-Middle East region. Its growth strategy is on track as it focuses on its core verticals: auto, consumer, industrials and retail.

"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."

NOL shares closed half a cent higher on Friday at 83.5 Singapore cents.