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NOL sinks deeper into the red, books US$105.1m loss in Q1
Blame lower freight rates on back weak trade demand.
Neptune Orient Lines (NOL) reported a net loss of US$105.1 million in the first quarter. This figure is 190.5% bigger compared to its losses in the same period last year.
The sharp surge in losses was on back of a 28% slide in the group’s core liner revenue, which was impacted by falling freight rates and weak container trade demand.
“Worsening overcapacity of shipping tonnage in 2015 hit the industry well into first quarter 2016. Freight rates which declined across major trade lanes to historic low are expected to remain weak in the face of slower demand growth,” said NOL Group President and CEO Ng Yat Chung.
Against a backdrop of weak global demand and excess capacity in the industry, APL’s first quarter year-on-year volume fell 6% due mainly to weak backhaul volume, while average freight rates fell 23% during the same period. As a result, APL’s 1Q 2016 revenue contracted 29% from the year before to US$1.14 billion.
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