NOL’s recovery hopes sink as shipping industry woes intensify
Its APL Logistics divestment will have a negative impact.
Neptune Orient Lines’ hopes of a near-term recovery are sinking as the liner industry confronts wave after wave of troubles.
According to OCBC, industry overcapacity will likely continue in 2015, which will lead to depressed freight rates since container shipping demand will be lower than capacity growth.
OCBC also noted that NOL’s divestment of APL Logistics has a net negative impact as we estimate the loss of earnings to more than offset savings in interest expenses.