NOL Group reports US$478 million loss for 2011
Thursday, 23 February 2012 | 00:00
NOL Group yesterday reported a US$478 million net loss in 2011 following net earnings of US$461 million 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$9.2 billion. The Group reported a Core EBIT (Earnings Before Interest and Taxes) loss of US$377 million for the year. It reported a fourth quarter 2011 net loss of US$320 million. 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$7.9 billion, down 5% from 2010. It announced a Core EBIT loss of US$446 million. Volume increased 5% year-on-year. Average Revenue Per FEU (forty-foot equivalent unit) was down 10%. APL said the average price of bunker fuel was 33% higher in 2011. “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.”
APL Logistics reported 2011 revenue of US$1.4 billion, up 12% from 2010. Core EBIT was US$69 million. Both were all-time highs for the business. Growth in auto logistics and a strong first half in international logistics contributed to the results. “The diversity of our portfolio led to record high revenue and profitability,” said APL Logistics President Jim McAdam. “We will continue to invest in our business infrastructure and logistics network to support business growth.”
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.
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