Thursday, February 11, 2010

NOL Reports Record Loss In 2009, Likely Down Through Middle Of 2010

Singapore-based Neptune Orient Lines Ltd., parent to ocean carrier APL, Ltd., said that instability in rates, sluggish volumes and higher fuel costs may make the firm unprofitable in the first half of 2010. 

NOL Chief Executive Officer Ron Widdows told reporters Thursday that unless the market turns around dramatically it is likely the firm will see losses in the first six months of the year.

The prediction came as NOL reported a record annual loss for 2009 and a fifth straight quarterly loss. NOL reported a 30 percent drop in revenue for 2009, ending the year $741 million in the red. The firm reported an $83 million net profit for 2008.

During the fourth quarter of 2009, NOL saw revenue fall 12 percent to $2 billion, with a net loss of $211 million compared to a $149 million loss in the fourth quarter of 2008. This was just over $80 million more than Wall Street analysts had predicted.

Widdows noted that it was too early to tell if the firm's 28 percent fourth quarter jump in cargo volume will sustain.

“It is early days and we have had a dramatic development in the market,” said Widdows. “If you had bet your pay check a month ago, you would have had a hard time predicting that demand would be as strong as it has been.”

Widdows said that NOL's losses were mainly the result of a 25 percent drop in the revenue per container vessel as falling worldwide demand and a glut of capacity drove rates below operating costs.

During 2009, NOL traffic fell to 4.6 million TEUs.

The firm's core shipping business accounted for the vast majority of the annual losses and NOL reported that the firm's terminals and logistics businesses remained profitable.