NOL Narrows Losses as Its Awaits Takeover Clearance

Image Courtesy: APL

NOL Group today reported a net loss of USD 77 million for the fourth quarter of 2015, an improvement of USD 8 million over 4Q 2014.

On a full year basis, NOL posted a net profit of USD 707 million. Excluding a one-time USD 888 million gain on the sale of its logistics unit, NOL incurred a full year net loss of USD 181 million, an improvement of 30% over last year.

“The last quarter of 2015 was particularly difficult. Container freight rates hit historical lows across major trade lanes as new vessel capacity came on stream amid softening market demand,” said NOL Group President and CEO Ng Yat Chung.

“Nonetheless, APL continued to reap cost savings and yield improvements. On a full year basis, its total costs of sales per forty-foot-equivalent unit (FEU) continued to offset the decline in total revenue per FEU, helping APL to continue reducing losses.”

APL reported a revenue of USD 1.28 billion in the final quarter of 2015, a 29% contraction from the year before. Average freight rates fell 22% amidst pressure from over-capacity in the industry. Volume slid 12% in the quarter over the prior year, mainly due to a reduction in backhaul volumes out of the US and the Gulf.

“In view of the continued operating losses of the group and the weakness of the container shipping industry, the NOL Board of Directors has recommended that no dividends be declared for the financial year ended 25 December 2015,” the company said.

With respect to the proposed acquisition of NOL by CMA CGM, the company said that all required anti-trust filings have been made and CMA and NOL are working to obtain the necessary anti-trust clearances. NOL expects the anti-trust clearances to be obtained by mid-2016.

The offer is subject to anti-trust clearances being obtained in the European Union, the People’s Republic of China and the United States of America.

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