NOL Group, the Singapore-based parent of the container liner company APL, on Wednesday reported a net profit of $20 million for the third quarter of 2013, down from $50 million in the same 2012 quarter.
Revenue in the third quarter was $2.1 billion, down 10 percent from the third quarter of 2012. In the first nine months of 2013, NOL had a profit of $61 million compared to a loss of $321 million in the first nine months of 2012. Revenue in the first nine months of 2013 was $6.5 billion, 7-percent below revenue in the first nine months of 2012.
NOL attributed the better profits so far this year to its continuing focus on operational efficiency and cost management.
“This is one of the weakest peak seasons we have seen in recent years, characterized by depressed freight rates and industry over-capacity,” said NOL Group Chief Executive Officer Ng Yat Chung. “Nevertheless, our business units delivered encouraging results. We improved our operational performance significantly from last year. Our focus on operational efficiencies is putting us in good stead for the long term.”
The liner company APL had third-quarter revenue of $1.7 billion, 13 percent less than in the third quarter of 2012. Average revenue per container was $2,372 per 40-foot equivalent unit (FEU), down 9 percent from the same 2012 period; container volumes were 669,000 FEU in the third quarter, down 5 percent from the third quarter of 2012.
“We are taking decisive actions to trim capacity and reconfigure our service networks to better align to the lower demand levels,” said APL President Kenneth Glenn. “We continue to strengthen our competitiveness, evidenced by our ability to generate positive operating results despite a difficult market. We believe that our improved cost structure will position us well in a low growth and volatile freight rate environment.”
APL’s headhaul utilization stayed above 90 percent in the first three quarters of 2013. Over the same period, APL’s average revenue per FEU dropped 7 percent, while operational efficiencies helped reduce cost of sales per FEU by 7 percent.
NOL’s supply chain management business, APL Logistics, had revenue of $371 million in the third quarter, a 2-percent increase over the third quarter of 2012.
In the third quarter of 2013, the company said international logistics services revenue improved 8 percent, year over year, to $143 million driven by business expansion within emerging markets in Asia and the Middle East. Over the same period, APL Logistics’ contract logistics business registered a 2-percent drop in revenue to $228 million, largely due to an extended plant slowdown in the North American automotive segment.
“In a tough marketplace, APL Logistics has improved our overall margins. We will continue to drive profitability by focusing on cost and service delivery to our customers,” said APL Logistics President Jim McAdam. “APL Logistics’ business expansion in the emerging markets remains firmly on track, and our recent acquisitions in the U.S. and China are contributing to our earnings.”
NOL: One of the weakest peak seasons in years
