NOL suffers Q4 bloodbath

Neptune Orient Lines sank deep into the red in 2011 following a near $1bn negative swing in its bottom line.

Much of the damage came in the fourth quarter, which was far worse than the market had feared, as revenue from its container shipping arm crashed.

Ng Yat Chung, CEO of the Singapore-listed outfit, said: “The performance of container shipping is disappointing.

“Over-capacity and higher fuel costs have negatively affected the whole container shipping industry.

“We are urgently addressing costs and all other factors under our control to improve our performance.”

NOL’s red ink ran to $473.93m in 2011, overturning a profit of $464.02m last time around.

Higher fuel costs were pinned for much of the hurt with revenue only slipping by 2% to $9.21bn.

The fourth quarter was a bloodbath with losses running to $318.72m, a major retreat from the $178.18m profit at the same stage in 2010.

Analysts polled by Reuters had expected the loss to reach $134m for the three month period.

Overall revenue plummeted 13% to $2.40bn in the quarter, with container shipping income tumbling 16% to $2.04bn.

NOL says sales costs shot up by $80m due in part to a steeper fuel bill.

Impairment losses on assets held for sale helped push up other operating expenses by over $40m.

Analysts and investors expecting some inspiration from the container line’s market outlook will have been disappointed.

NOL offered only the following: “Recent freight rates show signs of improvement. However the global economy remains uncertain.

“The container shipping industry continues to face high fuel costs and overcapacity. If these conditions continue, financial performance will remain weak.”

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