Singapore's Neptune Orient Lines (NOL), which includes its container shipping unit APL, narrowed its net loss to US$76 million in 2013, improving 82 per cent from a $412 million loss made the previous year, according to Shipping Gazette.
The results were helped by a non-recurring $200 million gain from the sale of its Singapore headquarter building.
This coupled with a continued focus on operational efficiency and cost cutting delivered $470 million in savings in 2013, which was added to the $504 million saved in 2012, totalling nearly $1 billion over two years.
"The delivery of new tonnage in 2013 added to the over-capacity in the container shipping industry. Overall freight rates declined through the year, with the fourth quarter recording one of the lowest levels the industry has seen in the last three years," said NOL group CEO Ng Yat Chung.
"Despite the tough environment, the group put in a better financial performance. We started the year with an improved cost base. Our liner business strengthened operating results, delivering a 72 per cent improvement in core EBITDA," said Mr Ng.
NOL Group reported positive core EBITDA of US$150 million, a 24 per cent year-on-year improvement from 2012. Over the same period, NOL revenues dropped seven per cent to $8.8 billion, resulting in core EBIT loss of $167 million, up nine per cent year on year.
APL reported a nine per cent decline in revenue to $7.3 billion, which the company attributed to capacity management and a fall in freight rates. Despite this, APL made a 2013 core EBIT improvement of eight per cent year on year posting a loss of $231 million.
"Our revenue was hard hit by a drastic drop in freight rates. We had also experienced one of the weakest third and fourth quarters in recent years," said APL president Kenneth Glenn.
"APL's improved cost structure will sustain our long-term growth, evidenced by our improving operating results. We are also sharpening our competitive edge through the adoption of a function-led management approach to speed up decision-making and improve market responsiveness," he said.
NOL's supply chain management business, APL Logistics, maintained its steady performance in 2013 despite the weak global economy. It delivered revenue of $1.6 billion, up two per cent from 2012. APL Logistics remained profitable, posting a full year core EBIT of US$64 million, four per cent down from the previous year.
Looking forward, the NOL statement said: "Global economic growth prospects are uncertain. Conditions in the liner industry are expected to remain challenging due to continued over-supply of capacity. Liner freight rates will remain under pressure. The group will continue its focus on managing costs and operational efficiencies"
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