NOL sails out of the red

SINGAPORE — Container shipping giant Neptune Orient Lines (NOL) yesterday reported it rebounded into the black in the second quarter, posting a net profit of US$890 million (S$1.22 billion) as it booked an extraordinary gain from the sale of its APL Logistics unit.

The net profit for the three months ended June 30 reversed a net loss of US$54 million in the year-ago period, but even without the one-off US$887 million gain, NOL would have bobbed above water with a net profit of US$3 million. In May, NOL completed the sale of its APL Logistics business to Japanese freight carrier Kintetsu World Express for US$1.2 billion.

However, revenue for the quarter fell by 24 per cent to US$1.6 billion. NOL said the second quarter saw severe freight rate erosion, with rates in major trade lanes falling to some of their lowest levels in recent years.

“Despite the tough operating environment, the group posted core EBIT (earnings before interest, taxes and non-recurring items) of US$29 million for the second quarter, compared to a loss of US$15 million the same period a year ago,” said NOL. “We remain focused on improving our cost competitiveness, yield optimisation and service reliability to return the liner business to sustained profitability.”

On speculation that Temasek Holdings has put up its 67 per cent stake in the company for sale, an NOL spokesperson told TODAY: “It is our practice not to comment on market speculation ... We are totally focused to turn the container shipping business around to sustained profitability.”

NOL shares closed unchanged at S$0.92 yesterday before the aftermarket earnings announcement.