Singapore-based NOL Group reported USD 890 million net profit for the quarter ended June 30, USD 887 million of which was gained through the sale of the company’s supply chain management business APL Logistics. The remaining USD 3 million operating net profit for the quarter was a vast improvement compared to a net loss of USD 54 million in 2Q 2014. APL, NOL’s container shipping business, recorded a 12% volume reduction in 2Q 2015 compared to the same period last year, due both to weak global demand as well as the carrier’s continued efforts to trim capacity in unprofitable trade lanes to optimise yield. Its average freight rates dipped 17% amidst pressure from over-capacity in the industry. Versus the same period last year, APL’s revenue fell 22% to USD 1.3 billion in the second quarter of 2015. In spite of reduced revenue, APL achieved an improved 2Q 2015 Core EBIT of USD 20 million, compared to a loss of USD 28 million over the same period last year. APL attributed its performance to stringent cost management as well as a yield-focused trade strategy that emphasises network rationalisation and better cargo selection. The carrier returned five expensive chartered ships in the second quarter. As a result, total cost of sales per forty-foot-equivalent unit (FEU) fell by 15% year-on-year. APL also kept its headhaul utilisation above 90%. These efforts mitigated the impact of lower volumes and freight rates in the quarter under review. APL’s schedule reliability also improved. According to the June edition of the Global Liner Performance Report published by SeaIntel Maritime Analysis, APL was the most reliable carrier in May 2015 with a global on-time performance of 85.5%, above the industry average of 78.3%. ”The Group’s container shipping business continued to face a challenging environment characterised by over-capacity and weak market demand. Nonetheless, APL reversed a core EBIT loss in the second quarter last year to a positive position this year,” said NOL Group President and CEO Ng Yat Chung. ”We remain focused on improving our cost competitiveness, yield optimization and service reliability to return the liner business to sustained profitability.” NOL reported USD 100 million in cost savings in 2Q 2015, bringing its total cost savings for the first half of the year to USD 255 million. ”There is room for further cost savings with another nine vessels scheduled for expiry in the second half of this year,” said Ng. NOL was recently rumoured to be put up for sale by its parent company Temasek Holdings earlier this month, with Temasek neither confirming nor denying the speculation. -Source: worldmaritimenews.com
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Singapore-based NOL Group reported USD 890 million net profit for the quarter ended June 30, USD 887 million of which was gained through the sale of the company’s supply chain management business APL Logistics.
The remaining USD 3 million operating net profit for the quarter was a vast improvement compared to a net loss of USD 54 million in 2Q 2014.
APL, NOL’s container shipping business, recorded a 12% volume reduction in 2Q 2015 compared to the same period last year, due both to weak global demand as well as the carrier’s continued efforts to trim capacity in unprofitable trade lanes to optimise yield. Its average freight rates dipped 17% amidst pressure from over-capacity in the industry. Versus the same period last year, APL’s revenue fell 22% to USD 1.3 billion in the second quarter of 2015.
In spite of reduced revenue, APL achieved an improved 2Q 2015 Core EBIT of USD 20 million, compared to a loss of USD 28 million over the same period last year.
APL attributed its performance to stringent cost management as well as a yield-focused trade strategy that emphasises network rationalisation and better cargo selection. The carrier returned five expensive chartered ships in the second quarter. As a result, total cost of sales per forty-foot-equivalent unit (FEU) fell by 15% year-on-year. APL also kept its headhaul utilisation above 90%. These efforts mitigated the impact of lower volumes and freight rates in the quarter under review.
APL’s schedule reliability also improved. According to the June edition of the Global Liner Performance Report published by SeaIntel Maritime Analysis, APL was the most reliable carrier in May 2015 with a global on-time performance of 85.5%, above the industry average of 78.3%.
”The Group’s container shipping business continued to face a challenging environment characterised by over-capacity and weak market demand. Nonetheless, APL reversed a core EBIT loss in the second quarter last year to a positive position this year,” said NOL Group President and CEO Ng Yat Chung.
”We remain focused on improving our cost competitiveness, yield optimization and service reliability to return the liner business to sustained profitability.”
NOL reported USD 100 million in cost savings in 2Q 2015, bringing its total cost savings for the first half of the year to USD 255 million.
”There is room for further cost savings with another nine vessels scheduled for expiry in the second half of this year,” said Ng.
NOL was recently rumoured to be put up for sale by its parent company Temasek Holdings earlier this month, with Temasek neither confirming nor denying the speculation.
-Source: worldmaritimenews.com