|
Singapore; 6
September, 2002 – Global transportation and logistics company Neptune Orient
Lines recorded a loss of US$151.4 million for the six months ending 30 June, on
turnover of US$2.2 billion.
Turnover fell by five per cent from US$2.3 billion, largely reflecting the record
low rates in its APL Liner business in the first half of the year. Liner volumes
increased 12 per cent to 753,500 forty-foot equivalent container units (FEU),
significantly above expectations.
NOL Group President and CEO Flemming Jacobs said, "Our focus on cost reduction
is continuing to yield results, but, as we have said before, no amount of cost
reduction can compensate fully for the massive reduction in rates. We are currently
seeing an improvement in rates, but we started the year from a very low base and
there's some way to go.
"As we have said previously, we came from a difficult past but we are on the right
track to full health with the recovery plan set in motion three years ago. We
are continuing to follow this plan, although with the strong headwind this year,
our progress is being slowed.
"We took a hit in the first half. However, there is increasing evidence that a
recovery has begun, not only illustrated through better volumes but also through
some rate improvements."
Mr Jacobs said NOL's supply chain management business, APL Logistics (APLL), made
encouraging gains at the revenue level, but it was disappointing that the first
half operating result core EBIT (Earnings Before Interest and Tax) was not yet
fully showing the targeted improvement. However, he said initiatives to increase
operational and organisational efficiency, plus new business being successfully
won in the Americas and in Europe, together with the joint venture developments
announced recently in China, would improve results somewhat in 2H02, and position
APLL for profitability in 2003.
American Eagle Tankers (AET), which transports crude oil, contributed positively
to the Group and maintained profitability despite the more difficult operating
environment in this sector as well.
"Charter rates across the industry fell heavily in the first half of the year,"
Mr Jacobs said, "but relatively speaking AET still performed well."
Mr Jacobs said the positive impact of AET's purchase of lightering company MTLP
in May would be felt in the second half of 2002.
Outlook
"The last twelve months have been tough for the whole industry," Mr Jacobs said,
"but it is starting to look brighter. Furthermore, traditionally in Liner shipping,
business volumes are stronger in the second half of the year, and current indications
are that volumes will continue to be brisk with consequent high capacity utilisation.
However, with the current rates this will not be enough to translate into profitability
for the Liner activities in the second half of 2002.
"We said that 2001 was a tough year, with average trade-weighted rates plummeting
to levels last seen during the Asian crisis in 1997/98. Let me tell you that if
we had the average 2001 rates this year, we would have achieved profitability
thanks to our progress on the cost management side."
Mr Jacobs said APL Logistics was actively reversing its performance but still
did not expect the full year to show a positive bottom line. He expected AET and
the Chartering division to maintain profitability with some improvement in the
tanker rates later in the year.
"Our response to the difficult environment has been to intensify our efforts to
make us profitable by focusing on better yields, lower unit costs and achieving
greater operating flexibility," he said, and added "Now with signs that a recovery
could be on its way, those efforts mean that NOL and its companies are well placed
to make the most of that recovery as it unfolds."
View
NOL Group First Half Financial Results - Printable PDF
Media inquiries:
Sarah Lockie, NOL (Singapore), +1-65-6371 5022; or email sarah_lockie@nol.com.sg
|
