During the Spring Festival, we had more evidence of how a scholar, army general and ex-Temasek MD is failing to refloat NOL which he steered onto the rocks. He had to sell the crown jewels to try to refloat NOL No need to remind readers that SMRT is run by a scholar and a retired SAF general. NOL today, the MRT ststem tomorrow.
Contrast NOL’s financial performance withwhat’s happening at Maersk Line.
NOL has suffered three straight years of pre-tax losses in challenging industry conditions.
The buyer, Tokyo-listed Kintetsu World Express (KWE), has said it will keep APL Logistics’ headquarters in Singapore.
“In an increasingly competitive liner shipping sector, NOL believes that it is imperative to strive to have the most cost-competitive position, and the strongest financial position in order to have a better chance to thrive,” NOL said yesterday.
“Accordingly, NOL has decided to dispose of its logistics business and focus on improving its core liner shipping business.”
Mr Ng Yat Chung, NOL’s group president and chief executive, said: “The transaction will also strengthen our balance sheet and unlock value for our shareholders.”
NOL, which posted its fourth-quarter results last Friday, said operational cost efficiencies helped narrow its net losses to US$85.1 million from losses of US$137 million a year earlier.
Even our constructive, nation-building media was forced to show how desperate the CEO had become: he sold the crown jewels, cannabalising NOL
The move sees NOL selling the only profitable part of its business. APL Logistics posted a 5 per cent jump in fourth-quarter revenue to US$458 million and core Ebitda of US$20 million, while APL, NOL’s container shipping business, posted losses.
NOL said the purchase price represents a 15 times multiple to the APL Logistics group’s reported core Ebitda, a measure of profit, for the full year of 2014.
Since August last year, NOL has been mulling over a sale of APL Logistics and undertook a competitive bidding process.
Maersk Line, the world’s biggest container shipping line, continued its strong performance by boosting net profit to $2.3bn last year from $1.5bn in 2013.
Seen as a bellwether for global trade as it transports 15 per cent of all seaborne freight, Maersk Line said it expected container demand to grow 3-5 per cent this year, well below the pre-crisis levels of more than 10 per cent but in line with 4 per cent growth last year.
“We basically don’t expect a lot of change. The low oil price should give some changes in patterns,” said Mr Andersen, pointing to growth in Asia-US and Asia-Europe trade but declines in north-south routes to Africa and Latin America.
Maersk Line expects to post a higher underlying profit this year than in 2014. The conglomerate as a whole said it expected an underlying profit this year of slightly below $4bn, compared with $4.1bn in 2014.