NOL’s net profit down 57% from 2005
Singapore-based container shipping, transportation and logistics company Neptune Orient Lines (NOL) made a net profit before non-recurring items of US$344 million for 2006, down 57% from 2005.
The group’s Core EBIT (Earnings before Gross Interest Expense, Tax and Non-Recurring Items) was US$401 million, 55% lower than the 2005 Core EBIT. Revenues were steady year-on-year at US$7.3 billion. NOL group president and chief executive officer, Dr Thomas Held, said: “NOL delivered a solid performance in 2006 in the face of a difficult operating environment. Our results show the combined impact of lower average freight rates and increased fuel costs over the past year.”
He noted that freight rate and fuel price factors have adversely impacted the operating results of the whole industry, with a number of companies reporting significant drops in profitability.
The NOL Group’s Return on Equity for the year was 18%, and Earnings per Share were 25 US cents.
“In our liner shipping operations, we again executed well our approach of keeping our network tight and maximising yields,” said Dr Held.
“We achieved high utilisation rates, averaging 96% in the headhaul direction for all trade lanes, in line with the previous year. Our liner operations faced very significant upward cost pressures during the year as a result of higher fuel prices. On the logistics side, this was a year of realigning our business with some growth in our Asian-origin business.”
We continued to realign our logistics activities to focus on international conveyance and to diversify the service offering and portfolio of business,” said Dr Held.
NOL says it took a “cautious” approach to expansion in 2006, recognising the challenging environment that existed, but plans to accelerate its growth this year, with a total of seven ships entering APL fleet and pushing capacity up by 10%.
Dr Held said: “Building upon our existing strong global footprint and broad capabilities, we are well placed to capitalise on the robust growth occurring across the Asia region. As we move into 2007, we will seek to create long-term value for our shareholders through a strategy for profitable growth and innovation. This will be built around organic growth and we will also be on the lookout for merger and acquisition opportunities. NOL Group will continue to innovate and expand its global presence. “
Looking ahead NOL notes: “Most analysts take the view that the market will remain in oversupply. At the same time, continuous cost pressures can be anticipated from high fuel and landside costs.”
The group’s Core EBIT (Earnings before Gross Interest Expense, Tax and Non-Recurring Items) was US$401 million, 55% lower than the 2005 Core EBIT. Revenues were steady year-on-year at US$7.3 billion. NOL group president and chief executive officer, Dr Thomas Held, said: “NOL delivered a solid performance in 2006 in the face of a difficult operating environment. Our results show the combined impact of lower average freight rates and increased fuel costs over the past year.”
He noted that freight rate and fuel price factors have adversely impacted the operating results of the whole industry, with a number of companies reporting significant drops in profitability.
The NOL Group’s Return on Equity for the year was 18%, and Earnings per Share were 25 US cents.
“In our liner shipping operations, we again executed well our approach of keeping our network tight and maximising yields,” said Dr Held.
“We achieved high utilisation rates, averaging 96% in the headhaul direction for all trade lanes, in line with the previous year. Our liner operations faced very significant upward cost pressures during the year as a result of higher fuel prices. On the logistics side, this was a year of realigning our business with some growth in our Asian-origin business.”
We continued to realign our logistics activities to focus on international conveyance and to diversify the service offering and portfolio of business,” said Dr Held.
NOL says it took a “cautious” approach to expansion in 2006, recognising the challenging environment that existed, but plans to accelerate its growth this year, with a total of seven ships entering APL fleet and pushing capacity up by 10%.
Dr Held said: “Building upon our existing strong global footprint and broad capabilities, we are well placed to capitalise on the robust growth occurring across the Asia region. As we move into 2007, we will seek to create long-term value for our shareholders through a strategy for profitable growth and innovation. This will be built around organic growth and we will also be on the lookout for merger and acquisition opportunities. NOL Group will continue to innovate and expand its global presence. “
Looking ahead NOL notes: “Most analysts take the view that the market will remain in oversupply. At the same time, continuous cost pressures can be anticipated from high fuel and landside costs.”