NOL Group reports Q1 net loss of S$142m
NOL’s group president and CEO, Ng Yat Chung says worsening overcapacity of shipping tonnage has hit the industry, while freight rates are expected to remain weak.
- Posted 06 May 2016 23:14
- Updated 07 May 2016 09:06
Its first-quarter Core Earnings before Interest, Taxes and Non-Recurring Items was a loss of US$84 million, while Core Earnings before Interest, Taxes, Depreciation and Amortisation remained positive at US$18 million, it said in a press release on Friday (May 6).
NOL’s group president and CEO, Ng Yat Chung, said: “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.”
“The difficult market condition is prompting consolidation and changes in alliances in the industry. While APL continues to make progress in taking out costs and improving yield, the proposed acquisition of APL by CMA CGM will help APL achieve scale to stay competitive in the industry,” he added.
NOL said APL’s first-quarter year-on-year volume declined 6 per cent due to weak backhaul volume, while average freight rates dropped 23 per cent. APL’s first-quarter revenue fell 29 per cent from a year ago to US$1.14 billion.
Separately, NOL noted that on Apr 29 this year, CMA CGM announced that it has received anti-trust regulatory clearance from the European Commission for its pre-conditional Voluntary General Offer for NOL. The remaining pre-conditions relating to anti-trust regulatory clearances are expected to be satisfied by mid-2016, said NOL.