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NOL's narrows Q1 losses even as freight rates fall

NOL's narrows Q1 losses even as freight rates fall
Neptune Orient Lines (NOL) narrowed its losses to $11m in the first quarter of the year despite a 13% fall in revenues.

The Singapore-headquartered line reported an $11m net loss in Q1 compared to a $98m loss a year earlier. Revenues fell 13% year-on-year to $1.96bn.

NOL blamed the fall in revenues on falling freight rates, the impact of US west coast port congestion and capacity cuts in unprofitable trades.

However, improving its bottom line were $155m in cost cuts and lower fuel prices.

“The group’s container shipping business continued to operate in a challenging environment. Nonetheless, APL has reduced its losses through capacity management, and improved cost and operational efficiencies,” said NOL Group president and ceo Ng Yat Chung.

Container line APL recorded revenues of $1.6bn with a 15% year-on-year, while average freight rates dipped 8%.

“APL eliminated unprofitable capacity for better yield in the first quarter of 2015. We extracted cost savings from lower bunker cost and through more efficient land and terminal operations as well as vessel and voyage operations,” said Kenneth Glenn, president of APL.

“These efforts help mitigated the impact of lower volumes and freight rates that we saw in the first quarter.”

APL Logistics reported a core EBIT of $17m in Q1. NOL shareholders approved the sale of the business unit to Kintetsu World Express last month and subject to regulatory approval and the sale is expected to be completed by the middle of the year.