Neptune Orient Lines (NOL), parent company of container liner company APL and APL Logistics, said it had a smaller loss in the fourth quarter of 2012 and for the full-year 2012 than it had in 2011.
NOL’s 2012 fiscal year ended Dec. 28.
Reporting results in U.S. dollars, the Singapore-based carrier, said it had a net loss of $98 million in the fourth quarter of 2012, compared to a loss of $320 million in the fourth quarter of 2011. Revenue in the quarter was $2.5 billion in 2012, compared to $2.4 billion in the fourth quarter of 2011. Core earnings before interest and taxes (EBIT) was a loss of $69 million, compared to a loss of $320 million in the fourth quarter of 2011.
For the full year, NOL lost $419 million in 2012, compared to $478 in 2011. 2012 revenue was $9.5 billion, compared to $9.2 billion in 2011. The core EBIT loss for 2012 was $212 million, compared to a core EBIT loss of $377 million in 2011.
NOL also said its efficiency program delivered $504 million of cost savings, which was in line with a target for 2012. The savings were primarily achieved through reduced fuel consumption, network optimization and increased terminal productivity.
“General market conditions in 2012 remained challenging. But thanks to our focus on increasing efficiencies throughout the group, we are in a better competitive position than before,” said NOL Group Chief Executive Officer Ng Yat Chung in a statement. “We have improved our cost base, renewed our fleet and expanded our logistics business. We are starting 2013 on a stronger footing than a year before.”
APL, NOL Group’s liner shipping business, improved its performance in 2012, reporting core EBIT loss of $279 million compared to a $446 million core EBIT loss in 2011. Revenue rose 2 percent to $8.1 billion
APL shipped 3.02 million 40-foot equivalent units (FEUs) in 2012, a 1 percent growth in volume, which it said was achieved with a smaller and more efficient fleet.
APL reduced its fleet capacity by 8 percent and total fuel consumption by 10 percent in 2012. It said average revenue per FEU was $2,509, relatively unchanged from 2011. APL also reported headhaul vessel utilization remained above 90 percent in 2012. The company said it continued to benefit from fuel, operational and other cost efficiencies.
“APL’s improved competitiveness has contributed to a better 4Q performance despite it being a traditionally weak season,” said APL President Kenneth Glenn. “We have continuously reduced our costs per FEU and will continue to focus on optimizing yield while delivering a high level of service to our customers.”
NOL’s supply chain management business, APL Logistics, reported record revenue of $1.6 billion, up 11 percent from 2011. Core EBIT was $67 million in 2012, down 2 percent.
But the company said fourth quarter core EBIT in 2012 was $26 million, up 34 percent from the same 2011 period.
“A 15 percent year-on-year growth in our contract logistics business, bolstered by strong demand in Asia for our international services, contributed to the results,” said APL Logistics President Jim McAdam. “We will continue the momentum gained through our strategic investments made in China, India and the US during 2012, for further growth in 2013.”
The company said McAdam would leave the company at the end of the year to pursue other interests.
Turning to the outlook for the coming year, NOL said “the global economy has shown some signs of improvement. However, the container shipping industry continues to face severe oversupply, causing considerable container freight rate uncertainty. Notwithstanding these challenges, the group will start 2013 with a better cost base as a result of a modern fleet and more efficient processes. Barring unforeseen circumstances, the group expects a better performance than in 2012."
Temasek Holdings - the investment arm of the Singapore government - is the largest single shareholder in NOL with a 69 percent holding. - Chris Dupin