NOL profit hits US$100 mln to overturn 2009 loss

Global container shipping company improves shipping volume, increases group and logistics revenue by 53% and 45%, respectively.

Neptune Orient Lines (NOL) on Friday reported a net profit of US$100 million for the second quarter of 2010, a huge flight from a net loss of US$146 million in the same period last year.

According to a NOL financial report, the Group’s Core EBIT (Earnings Before Interest and Taxes) for the quarter hit US$114 million compared to a Core EBIT loss of US$131 million in the same quarter in 2009. Second quarter 2010 revenue increased 53% to US$2.1 billion, the report said.

“Continued strong container shipping volumes and improving freight rates have helped return us to profitability,” said Group President and CEO Ronald D. Widdows. “The result for this latest quarter reflects significant progress as we turn around our performance from the economic downturn of 2009.”

NOL reported Core EBIT (Earnings Before Interest and Taxes) of US$40 million for the first half of 2010, compared to a US$353 million Core EBIT loss a year ago. Revenue in the first half reached 44% to US$4.2 billion. Net profit for the first half of 2010 was US$1 million, compared to a net loss of US$391 million in the first half of 2009.

However, NOL said it will not pay an interim dividend to shareholders but may consider a final dividend to be paid based on its current policy of paying an annual dividend of 20% of net profits after tax.

Meanwhile, NOL’s Liner shipping business, APL, reported total revenue of US$3.7 billion in the first half of 2010, up 46% from US$2.5 billion a year ago. Volume in the first half also increased 39% to 1.35 million FEUs (forty-foot equivalent units). Core EBIT for the first half was US$13 million, up from a Core EBIT loss of US$372 million a year ago.

“Vessels were effectively full during much of the first half of 2010 even though we reintroduced idled vessels to our network and added incremental capacity,” said APL President Eng Aik Meng.

The APL President said the company will continue to emphasize operational efficiency and service reliability to meet the needs of our customers.

APL Logistics, NOL Group’s supply chain management business, reported Core EBIT of US$27 million in the first half of 2010, up 13% from 2009. Revenue has increased by 33% to US$578 million. The improvement was attributed primarily to increased volume across various business lines, higher rates in the freight forwarding business and growth in the auto logistics sector, the financial report said.

“We are particularly encouraged that average weekly revenue in the second quarter of 2010 was the highest it has been since late 2008,” said APL Logistics President Jim McAdam.

NOL said it is expecting further improvement in container shipping volume and rates and it is looking forward to seeing significant advancements in third quarter profits.