NOL Reports 2009 Net Loss of US$741 million

Neptune Orient Lines (NOL) has announced a net loss of US$741 million for 2009, compared with a net profit of US$83 million for 2008.

For the fourth quarter of 2009 (4Q09), NOL recorded a net loss of US$211 million, compared to a net loss of US$149 million for the fourth quarter of 2008 (4Q08).

At the Core EBIT level NOL posted a loss of US$651 million for 2009, compared to a profit of US$213 million for 2008. Core EBIT for 4Q09 was a loss of US$183 million, compared with a Core EBIT loss of US$45 million for the corresponding period in 2008.

Revenue for 2009 was down year-on-year by 30% to US$6.5 billion.

NOL Group Chairman, Mr Cheng Wai Keung, said: "2009 was a most demanding year. We witnessed a worldwide economic downturn of unprecedented scale and, as a consequence, experienced a major slowdown in global trade. In the face of very difficult market circumstances, the Group has reported a substantial loss."

NOL announced last year that its new policy is to pay annual dividends of 20% of net profits after tax. Therefore, no dividends will be paid for the financial year 2009.

NOL Group President and Chief Executive Officer, Mr Ronald D. Widdows, said: "The 2009 results were disappointing and show the impact of sharp falls in demand and freight rates, especially in the first half of the year. This is evident from the dramatic reduction in annual revenue."

"Through the later part of 2009, improved volumes and active capacity management led to higher utilisation rates, but earnings remained depressed due to low freight rates which continued below levels which enable full cost recovery."

"The Logistics and Terminals businesses contributed positively to the Group's performance."

"Towards the end of the year, NOL achieved a stronger market position in a number of key liner shipping trades with better volumes and freight rates."

"The Group has continued paying attention to the fundamentals – providing excellent reliability and customer service, reducing costs, increasing efficiency and maintaining the strength of the balance sheet. The NOL Group is positioned to take advantage of an improving market environment."

NOL's Outlook statement said: "At our 3Q09 results announcement, NOL indicated continuing losses in the first half of 2010. In early 2010, there have been improvements in volumes and asset utilisation in NOL’s principal markets. In addition, freight rates have stabilised and trended upwards in some trades. If these conditions continue, better business performance is possible. However, significant risks remain – particularly the sustainability of demand and higher fuel costs. The Group will continue to pursue strategies which reflect the current operating environment, including the achievement of cost savings and improved asset utilisation, yields and productivity."

Source: NOL Group