One-time charges for restructuring, vessels held for sale contribute to second quarter net loss of US$118 million
SINGAPORE, 8 AUGUST 2012 – NOL Group today reported second quarter 2012 Core EBIT (Earnings Before Interest and Taxes) of US$16 million, a US$57 million turnaround in the key profitability measure from a year ago.
NOL’s container shipping line, APL, reported second quarter Core EBIT of US$7 million. It was the first time since the fourth quarter of 2010 that the shipping business has been profitable. NOL attributed the result to improved freight rates and its efforts to control expenses and improve efficiency. APL Logistics, NOL’s supply chain management business, reported second quarter Core EBIT of US$9 million.
NOL said one-time charges of US$112 million led to a second quarter net loss of US$118 million. The charges were for organizational restructuring and the sale of obsolete vessels to make room for more efficient ships and to reset vessel slot costs. NOL said that without the non-recurring charges, the second quarter net loss would have been US$6 million.
“The one-time charges were difficult but necessary,” said Group CEO Ng Yat Chung. “We need a more efficient organization and a more modern, cost-competitive fleet to deal with the oversupply situation in the container shipping industry.”
NOL reported an 8％ revenue increase in the second quarter compared to the same period a year ago. The company said that through two quarters of 2012 it has achieved US$225 million in expense reductions toward a full-year goal of US$500 million.
Improved fuel efficiency accounted for much of the cost savings, the company said. Fuel use was reduced by 7％, in the first half of 2012 from a year ago in spite of a 4％ increase in cargo volume.