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'Severity of the collapse in global trade is without precedent': NOL's Ron Widdows

Singapore: Neptune Orient Lines, parent of boxline APL, released its annual results today, another clear indicator of the drastic decline in world trade since last September.
NOL reported a net profit for 2008 of US$83 million, 84% lower than 2007.
The group's 2008 Core EBIT of US$213 million was down 64% from the prior year.
For the fourth quarter of 2008 (4Q08), the company reported a net loss of US$149 million and a loss at core EBIT level of US$45 million.
The fourth quarter result includes US$72 million of restructuring charges. NOL was one of the first shipping companies to react to the downturn, laying off a tenth of its staff.
Revenue for 2008 was up 14% year-on-year to a record US$9.29 billion.
NOL group president and chief executive officer, Ron Widdows, said: "The results we are announcing today show the impact of a severe market downturn in the latter part of 2008, caused by reduced consumer confidence in the wake of the global economic crisis. They also take account of significant restructuring costs, which reflect actions taken in the fourth quarter to place the company on a better footing for the conditions ahead."
"The severity of the collapse in global trade over recent months is without precedent. Since late September 2008, we have seen a consistent, week-by-week drop in shipment levels across nearly all trade routes."
"Though we recognised early the pattern of decline in market conditions, and took decisive action to reconfigure our business, the adjustments could not fully counter the speed and dramatic nature of the downturn being experienced in global container trades."
Mr Widdows said the company had acted during the fourth quarter to restructure operations, rationalise container shipping assets and reduce its global workforce.
"We will continue to adjust our business to ensure we weather this storm and emerge from it in the best possible shape. As we navigate through the current tough conditions, we do so with an eye to positioning our business for future growth and to take advantage of the considerable opportunities that will arise in the wake of this business downturn," said Mr Widdows.
Continuing positive operating cash flows through 2008 have ensured the company's balance sheet remains strong. At 26 December 2008 the group had net debt of US$816 million and a net gearing level of 0.33 times.
In a company statement, NOL's 2009 outlook was not at all rosy.
"Container shipping and related businesses are in the midst of a pronounced downturn which is expected to extend through 2009, the company said in a statement. "Reduced consumer demand worldwide, coupled with excess supply of new vessel tonnage is creating a very difficult business environment."
"Conditions similar to those in the fourth quarter of 2008 are expected to continue through 2009. NOL anticipates reporting a loss for the year 2009."  [10/02/09]


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