By Yang Huiwen SINGAPORE container shipper Neptune Orient Lines on Tuesday posted a net loss of US$149 million (S$223.2 million) in the fourth quarter, compared to a net profit of US$196 million a year ago.
Revenue slipped 6 per cent to US$2.3 billion.
The company, which is 66 per cent owned by Temasek, expects to post a loss for 2009.
Said its Group President and CEO Ron Widdow in a statement: 'Since late September 2008, we have seen a constant week-by-week drop in shipment levels across nearly all trade routes,'
Last month, NOL, which has cut jobs, said it carried 24 per cent fewer containers in the six weeks to Dec 26 versus a year earlier. Its container volume fell 12 per cent in the four weeks to Nov 14.
NOL warned in November it would report an operating loss in the fourth quarter and has since laid off about 1,000 staff and shifted its US headquarters to Phoenix, Arizona from Oakland, California to cut costs.
Neptune Orient gained 5.1 per cent to $1.24 at the close of trading on Tuesday. The stock tumbled 71 per cent last year, the biggest annual drop in at least two decades, according to Bloomberg data.
Shipping lines have cut their basic rates to zero and are applying only surcharges on Asia-Europe routes, Lloyd's List said on Jan 13. The global fleet is also set to surge as shipyards complete orders received two or three years ago when trade was booming, said Bloomberg.
New ships with a combined capacity of 3.9 million cargo- boxes are also due for delivery by the end of 2010, a third more than in the past two years, according to AXS-Alphaliner data.
Freight rates could fall by 35 per cent this year and 7 per cent in 2010, HSBC Holdings Plc analysts Azura Shahrim and Mark Webb wrote in a Jan 15 report.
By business nature, container shipping trade & export growth declines. TEU figures are not good. Mr Widdows himself admit to a difficult 2009 & do not see any improvement in his commercial environment (check out The Edge interview last week). However there may be spin off opportunities which he may look out for. For now, continued restructuring is his pirority. One thing he say very luckily is that he drops Hapag Lloyd acquisition otherwise NOL's debt obligations rises, causing NOL further debt pressure. This may cause distress to their bottom line.
Plus the trend I see - many ships still docking near East Coast. Not yet set off.
NOL should be on a good upside once macroeconomic indicators point upwards & global trade improves. Good time to come in by then - my personal thoughts.
Already the latest country to suffer recession is Taiwan right after Japan.
Betting objective: Cover up fixed monthly expenses!
By business nature, container shipping trade & export growth declines. TEU figures are not good. Mr Widdows himself admit to a difficult 2009 & do not see any improvement in his commercial environment (check out The Edge interview last week). However there may be spin off opportunities which he may look out for. For now, continued restructuring is his pirority. One thing he say very luckily is that he drops Hapag Lloyd acquisition otherwise NOL's debt obligations rises, causing NOL further debt pressure. This may cause distress to their bottom line.
Plus the trend I see - many ships still docking near East Coast. Not yet set off.
NOL should be on a good upside once macroeconomic indicators point upwards & global trade improves. Good time to come in by then - my personal thoughts.
Already the latest country to suffer recession is Taiwan right after Japan.
If you read APL businesses, their main industry verticals under one of their divisions - logistics shipping are mainly retail (clothing & footwear), automotives (spare parts), electronics etc. If these businesses are suffering from slower & lower export demand to other countries, will they readily engage NOL as their shipper for one stop solution provider or to utilise their transhipment hub/terminal services as often as before in the good old times?
Plus, the macroeconomic trends are still weak. There are many other external factors. Internally, NOL has already mentioned on cutting unwanted business costs, restructuring their units & allocating effective resources to certain priorities; hence I will be more keen to know NOL's clear direction first; how they plan to steer their strategic focus across Asia, Middle East & Europe.
Having said that, based on the business cycle model, usually when the global economic trade improves, the trade flow start showing signs of circulation, NOL should be the first to recover, being in the transportation sector. That should then be a good time to enter.
Above are my simple brief summarisation of my thoughts free to discuss.
This message was edited by cookieguy on 08-Mar-2009 @ 2:08 AM
Betting objective: Cover up fixed monthly expenses!
SINGAPORE: Container shipping line Neptune Orient Lines said it will increase cost-saving measures as it forecasts its first loss in seven years on slumping global trade.
The company lifted its cost-savings target for the year to as much as US$550 million. That's more than double the initial plan of US$250 million.
This was revealed in a presentation to shareholders on Wednesday.
NOL added that its CEO Mr Ron Widdows has voluntarily agreed to take a 20 per cent cut in basic pay.
Chairman Cheng Wai Keung will take a 40 per cent reduction, while non-executive directors have agreed to take a 20 per cent cut this year.
Mr Widdows said the container carrier continues to look at opportunities to improve its overhead costs and find ways to do things more efficiently.
NOL expects a loss this year as the global recession cuts demand to transport Asian-made products. - CNA/vm
Today local bourse in the red. NOL, an index stock shed 7 cents today.
What next for NOL? Especially their last quarter results briefing coming on end Oct.
And already Mr. Widdows mention that FY09 will be in a operating loss. Take note - Temasek holds at least 60% of stake. Hence, they have BB backing.
To my opinion, NOL will not go bankrupt. It is the face of Spore container shipping trade.
Export numbers in Spore shows improvement. NOL join hands with other container shipping companies to increase rates (see latest press release in their website). They have to do that. But might take a little while to reap results.
The question here is - when can we see NOL register their first net profit? I believe it's not at current moment yet.
So let's pray for NOL to drop more with more market participants fleeing!
Betting objective: Cover up fixed monthly expenses!
why? any 2 cents thoughts to share? NOL is a trading stock if you ask me...
Shipping and Airlines are not looking too good in the near future. Pirates are increasing in the international waters. Too many ships built and not used. There are lots of info on this, u can search for it on the internet. Most importantly, the industry is heavily dependent on the oil price. Oil prices are fluctuating too much.
But I m no expert, if you can see a future for shipping and airlines, go ahead, maybe the companies can make a big comeback once the global economy BOOMZZZZ
Why would someone surf a betting forum and flame another person if he himself nber bet?
Most females nber bet on soccer but I dun see them surfing a betting forum "just for fun" and start flaming people.
Singaporean males realli have lots of free time on their hands. Should try to make more babies to help the birth rates.
Shipping and Airlines are not looking too good in the near future. Pirates are increasing in the international waters. Too many ships built and not used. There are lots of info on this, u can search for it on the internet. Most importantly, the industry is heavily dependent on the oil price. Oil prices are fluctuating too much.
But I m no expert, if you can see a future for shipping and airlines, go ahead, maybe the companies can make a big comeback once the global economy BOOMZZZZ
That aside, shipping trade will pose a rise in demand once international trade flow move, depending on the import/export numbers, as well as TEU.
Right now PSA posts weak container shipment numbers as far as I know, so we might have to wait for a while before the industry starts to pick up.
On short term basis based on historic business cycle, shipping industry will be the next to pick up, after property and finance; that is if you are one whom research on cycle investment.
Betting objective: Cover up fixed monthly expenses!
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Not yet set off. 
