NOL swings to quarter billion dollar loss in Q1

Singapore: Neptune Orient Lines, southeast Asia's largest container carrier, reported its biggest quarterly loss for seven years with a net loss of $244.6 million in the three months ended April 3, compared with a net income of $120.7 million a year earlier, it said in a Singapore stock exchange statement today. Revenue fell 36 percent to $1.5 billion.

'For the rest of the year, NOL anticipates a continuation of adverse business operating conditions,' the company said in a statement today. 'NOL reiterates that it expects to post a significant full-year loss.'

APL Ltd., the container-shipping unit of Neptune Orient, posted a loss of $236 million before interest and taxes in the three-month period. Revenue dropped 36 percent to $1.29 billion. The unit carried 481,000 forty-foot equivalent boxes in the quarter, 27 percent fewer than the year before. Average container freight rates sank 16 percent to $2,474 in the period.

In  research note Citigroup voiced concern about NOL's growing debts. 'Net debt-equity increased to 45% as at March 2009 from 33% in Dec-08 and 14% in Mar-08,' Citigroup wrote in a note to investors. 'NOL has a total capital commitment of c.US$920M and non-cancellable operating lease commitment of US$5.8B (of which US$676M are payable in the remainder of 2009). Although we expect NOL to have little trouble in securing more credit, we are concerned about its rising financial leverage especially if the shipping sector downturn is prolonged.'  [13/05/09]