NOL reports US$478m loss for 2011
NOL Group has reported a US$478m net loss in 2011 following net earnings of US$461m in 2010. The container shipping and logistics company said unsettled economic conditions, high fuel costs and lower freight rates impacted results.
"The performance of container shipping is disappointing." said Group CEO Ng Yat Chung. "Over-capacity and higher fuel costs have negatively affected the whole container shipping industry. We are urgently addressing costs and all other factors under our control to improve our performance."
NOL said 2011 revenue decreased 2% to US$9.2bn, while its Core EBIT (Earnings Before Interest and Taxes) was a loss of US$377m for the year. On a more positive note, NOL's supply chain management business, APL Logistics, reported record performance in revenue and Core EBIT.
APL, NOL Group's liner shipping business, reported 2011 revenue of US$7.9bn, down 5% from 2010, while its Core EBIT figure was a loss of US$446m. Volumes increased 5% year-on-year, however "the volume increase was offset by downward pressure on freight rates and high fuel costs," said APL President Kenneth Glenn. "We must continue to drive down costs and make better cargo selection decisions in the face of this industry-wide trend."
Conversely, APL Logistics reported 2011 revenue of US$1.4bn, up 12% from 2010. Core EBIT was US$69m. Both were all-time highs for the business.In its outlook for 2012 the company said: "Recent freight rates show signs of improvement. However the global economy remains uncertain. The container shipping industry continues to face high fuel costs and overcapacity. If these conditions continue, financial performance will remain weak."