CMA CGM takeover target, NOL slumps to $77m Q4 loss

CMA CGM acquisition target Neptune Orient Lines (NOL) plunged $77m into the red in the fourth quarter, losing $181m for 2015 as whole, excluding a one-time gain from the sale of APL Logistics.

In line with the difficulties faced by other container lines in Q4 2015 NOL reported a $77m net loss for the three-month period compared to an $85m loss in the same period a year earlier.

Full year, excluding the one-time $888m gain from the sale of APL Logistics, NOL reported a loss of $181m against a $260m loss in 2014. NOL filed a notice of three years of consecutive losses with the Singapore Exchange.

Adding in the gain from the sale of APL Logistics NOL reported a profit of $707m.

In the final quarter of 2015 APL reported a 12% decrease in volumes over the same period a year earlier and a 22% drop in average box rates.

The company said APL had maintained “prudent control” of its deployed capacity. According to Alphaliner of APL’s total capacity of 531,730 teu, just 21% is chartered in, suggesting an aggressive policy of returning chartered in tonnage.

“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.”

CMA CGM launched a $2.4bn takeover of NOL in December 2015, with majority shareholder Temasek Holdings giving its undertaking to accept the offer. The offer is subject to anti-trust clearances.

CMA CGM has so built up a 3.74% stake in NOL in open market share purchases at below its offer price of SGD1.30 per share.



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