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Neptune Orient Lines (NOL), of Singapore, has posted a 64 per cent decline in net profit for the first quarter of the year to US$43 million, compared to the same quarter a year ago when the group reported earnings of $120 million.
NOL's first quarter results for the period from December 30 to April 6 show that the group's core earnings before gross interest expense, tax and non-recurring items (EBIT) was $58 million, down 59 per cent year on year.
Group revenues during the reporting period rose by one per cent over the same quarter a year ago to $1.9 billion.
The liner business achieved core EBIT of US$41 million, down 67 per cent over the previous year despite revenues from the liner business being two per cent higher than in the previous year at $1.57 billion. This meant that average revenues per FEU declined six per cent.
"Freight rate levels for our company in the first quarter of 2007 were, on average, six per cent lower than in first quarter 2006. This reduction in rate levels year on year has been the major factor in the lower profit reported today. The effect of recent freight rate increases achieved in some key trade lanes have yet to be fully reflected in these results," said NOL president and CEO Thomas Held.
Overall total container volumes grew by 10 per cent over the first quarter of the previous year. Strongest growth was recorded in the Intra-Asia region where volumes grew 25 per cent year on year.
Liner network capacity increased by 11 per cent due to the introduction of new vessels and services, network changes, and enhanced slot purchase and sharing arrangements with other carriers, a group statement said.
The liner business delivered cost reductions of US$45 million in the first quarter through increased fuel efficiencies, network optimisation and improved management of container equipment. Overall liner costs per FEU improved by 1.5 per cent year on year.
In the logistics segment, APL Logistics registered a 25 per cent fall in core EBIT to $12 million. Revenues from logistics were six per cent lower than in the first quarter of the prior year at $325 million. The Asia-Middle East region registered the strongest year on year revenue growth, accounting for 21 per cent of overall logistics revenues. |
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