NOL sinks deeper with US$91.1m loss in 3Q11

The shipping firm’s net losses widened from US$57m in 2Q on the back of a shortened peak season.

Although revenue increased by 2.9% QoQ, NOL recorded a net loss of US$157.8m in 9M11, or 14% higher than the previous forecast of analysts.

In a statement, OCBC Research said shipping customers this year are holding back on shipments due to uncertain economic conditions. 

The traditional peak shipping which typically happens in 3Q failed to materialize this quarter as a result of weak demand, according to the analyst.

NOL's worse than expected net loss, despite a 6.9% volume growth in 3Q11 to 699,700 FEUs, was partly contributed by weak freight rates resulting from continued downward pricing pressure and a short period of peak season surcharges.

The company’s average revenue per FEU (ARPF) was down 18.6% YoY in 3Q11. 

Weak freight rates were especially evident in the Europe trade lanes, which saw ARPF fall 24.9% YoY. However, bunker fuel prices remained high despite a weak shipping environment.

Bloomberg's 380 Centistoke Bunker Fuel Spot Price Singapore Index in 3Q11 averaged 661 points, or 48.9% higher than a year ago.