August 10 2012
NOL widens loss, but APL makes first quarterly profit since Q4 2010
SINGAPORE's NOL Group reports that its principal business, the APL container line, posted its first quarterly operating profit since the last quarter of 2010.
APL's second quarter operating profit - without extraordinary items - came in at US$7 million against last year's quarterly loss of $53 million. Revenue stood at $2 billion, up seven per cent, derived from a 750,000 FEU throughput, an increase of three per cent with revenue per box averaging $2,615, up three per cent year on year.
APL attributed the improvement to higher freight rates and efforts to cut costs and improve efficiency. APL Logistics, NOL's supply chain management business, reported second quarter operating profit of $9 million.
While quarterly gains were impressive, overall, APL widened its first half operating loss to $239 million from $61 million last year, drawn on revenues of$2.51 billion, down two per cent, which derived from box volumes of 1.5 million FEU, an increase of four per cent.
But one-off charges of $112 million, arising from restructuring costs and replacing old ships with new ones, led to a second quarter net loss of US$118 million.
Without the one-off charges, the second quarter net loss would have been $6 million, said the company statement.
"The one-time charges were difficult but necessary," said group CEO Ng Yat Chung. "We need a more efficient organisation and a more modern, cost-competitive fleet to deal with the oversupply situation in the container shipping industry."
Improved fuel efficiency accounted for much of the cost savings, the company said. Fuel use was reduced seven per cent in the first half of 2012 from a year ago despite a four per cent increase in cargo volume.
The company said it reduced costs for moving empty containers back to major export centres by $19 million in the first half of 2012. Lowering the cost for repositioning empties was a key objective, APL said.
"Market conditions improved in the second quarter but just as important were the steps we took to improve efficiency," said APL president Kenneth Glenn. "We expect further improvement as we continue to bring fuel-efficient ships into the fleet and optimise our network," said the company statement.
APL Logistics reported second quarter revenue of US$361 million, up 15 per cent from a year ago. Contract Logistics revenue increased 20 per cent due to growing demand for rail and other land-based logistics services. International logistics services revenue was up seven per cent on rising volume.
"The group's performance improved in the second quarter due to rate increases and cost savings. However, the group's financial performance will depend on freight rates, global economic position, overcapacity in container shipping and fuel prices. The outlook for these factors remains uncertain. Nevertheless, the group will continue to focus on managing its costs and capacity," said a company statement.
Neptune Orient Lines (NOL) is a Singapore-based global container shipping and logistics company. Its container shipping arm, APL, provides container shipping, terminal services and intermodal operations.
Zim adds call at Da Chan Bay to its East Med Express eastbound service
ISRAEL's largest cargo shipping company, Zim Shipping Lines, has begun calling at West Shenzhen Port's Da Chan Bay Terminal One (DCB) on its East Med Express (EMX) eastbound service in a move to boost its offering in the western Pearl River Delta region.
"Da Chan Bay is unique in the western Pearl River Delta (PRD) because it provides world class terminal operations together with the capacity for long term growth in the PRD. We look forward to supporting Zim's continued success in this critical market," said Modern Terminals chief commercial officer Peter Levesque.
Said Zim Asia Pacific marketing director Kevin Li: "Zim has been working with Modern Terminals for almost 40 years and Zim was among the first carriers to call at Da Chan Bay."
Said Da Chan Bay Terminal One managing director Benjamin Lai: "We welcome the addition of Zim's EMX service to Da Chan Bay, and we look forward to providing the EMX with the same level of operational excellence that Zim and its customers have come to expect from us in Da Chan Bay".
Zim's East Med Express (EMX) eastbound service will use vessels with a carrying capacity of 4,000 TEU to call at Shenzhen-Da Chan Bay Terminal One weekly with a port rotation of Busan, Shanghai, Ningbo, Da Chan Bay, Port Kelang, Suez Canal, Haifa, Ambarli-ist, Odessa, Novorossiysk, Ambarli-ist, Haifa, Suez Canal, Colombo, Port Kelang, Shenzhen-Da Chan Bay and back to Busan.