NOL has biggest quarterly loss in a decade on rates

Neptune Orient Lines, owner of Asia’s No. 3 container line, posted its biggest quarterly loss in at least 10 years because of falling freight rates and higher fuel costs, reported Bloomberg.

The shipping line reported its fourth straight quarterly loss of US$320.4 million ($403.1 million) in the three months to Dec 30, compared with a profit of US$177 million a year earlier, the company said in a stock exchange statement today. That was wider than the US$123.6 million average loss of eight analysts’ estimates compiled by Bloomberg. Sales dropped 13% to US$2.4 billion.

The company’s APL unit and five other container lines will begin cooperating on Asia-Europe routes next month after price wars and a glut of vessels caused industrywide losses. A.P. Moeller-Maersk A/S, the largest cargo-box carrier, is also cutting Asia-Europe capacity 9% in a bid to revive rates.

“Lines need to keep capacity in control,” said Erik Bergoo, an analyst at DNB Bank in Singapore. “It will be a volatile journey over the next two years.”

Financial performance will “remain weak” if high fuel costs and overcapacity continue, the company said.

“The performance of container shipping is disappointing,” Chief Executive Officer Ng Yat Chung said in the statement. “We are urgently addressing costs and all other factors under our control to improve our performance.”