NOL profit plummets

Singapore - Global container shipping conglomerate Neptune Orient Lines (NOL) posted a 19% fall in net profit for the second quarter of the year, and predicts more difficult times for container shipping lines for the rest of the year. 

NOL saw net profits fall to US$76 million in Q2 2008, a 19% slip from the same period a year earlier. Half-year net profits stood at US$196 million, up 45% over the same period in 2007.

"Our results for the year to date show a good financial performance in the first quarter and reflect the more difficult business environment experienced in the second quarter," said group chairman Cheng Wai Keung.

"The second quarter was impacted by a large run up in bunker costs and a deterioration in core rate levels in the Asia-Europe trade," group president and CEO Ron Widdows said.

The decline is the first the shipping company has experienced in five quarters.

NOL said shipping lines were doing business in a difficult environment. "Deteriorating market conditions and high bunker prices will result in a significantly more challenging operating environment for container shipping lines in the second half of this year compared to the first half," the company said in a statement.

Going forward, it plans to focus on keeping its asset base tight and manage costs and productivity.

"Even as it sharpens its focus on improving efficiency, the group will continue to invest in new capabilities that will have a positive impact on the service delivery globally, with the aim of continuing to perform at the top of the container shipping sector," the company said.

Earlier, the group announced the appointment of Eng Aik Meng as president of container shipping arm APL. Eng rejoins the company after serving NOL as senior vice president of APL's Intra-Asia business from 2002-2007.

He rejoins NOL from shipping and industrial supply chain company IMC, where he served as deputy CEO.

Eng succeeds Widdows, who was appointed to the position of group president and CEO after Thomas Held left the group abruptly last month.