Singapore’s Neptune Orient Lines (NOL) has slashed its first-quarter 2015 loss to USD11 million, compared with USD98 million in the first quarter of 2014.
Pre-tax earnings totalled USD133 million in the period, up from USD33 million last year, while its revenue declined 13% to USD2 billion in the same period.
The revenue fall was due to freight rate erosion, planned capacity cuts in unprofitable trades, and adverse impact from the US West Coast port congestion.
“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.
“While congestion in the US West Coast is easing, the liner industry continues to face persistent overcapacity and uncertain global economic prospects.”
NOL’s liner shipping unit APL recorded a first-quarter 2015 revenue of USD1.6 billion. First quarter year-on-year volume fell 15%, mainly due to planned capacity cuts in unprofitable trade routes and the impact from the US West Coast port congestion.
APL’s average freight rates dipped 8% versus the same quarter last year.
“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. These efforts help mitigated the impact of lower volumes and freight rates that we saw in the first quarter,” said APL president Kenneth Glenn. “We shall further optimise yield through capacity management, network design and cargo selection. Network design will help to reduce complexity in our business, lower slot cost and improve reliability; and better cargo selection will improve roundtrip profitability in our key trades.”