April 17, 2009
* Second straight quarterly loss expected
* Warns 2009 loss to be worse than analysts expectations
* Analysts expect recovery in container business H2
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SINGAPORE, April 17 (Reuters) - Singapore's NOL <NEPS.SI>, the world's seventh biggest container shipping firm, expects to report a net loss of around $240 million in the first quarter, its second straight quarterly loss, as it battles an economic slowdown.
The company said the worsening of business conditions and a traditionally slower period for container shipping will result in the estimated loss, which is more than the $149 million loss it had suffered in the fourth-quarter.
Neptune Orient Lines (NOL) said in a statement late on Thursday that it expects its full year loss to be significantly worse than financial analysts' current estimates.
The first quarter's figure is comparable to the loss analysts had forecast for NOL for the whole of 2009. They expected a net loss of $255 million for this year, according to a mean forecast by 12 analysts polled by Thomson Reuters.
Analysts expect NOL's losses will narrow from mid-2009 as global trade picks up and volumes start to recover from the first quarter's dismal numbers.
"We have suggested that the consensus estimates were subject to a downside risk, and do not think the market should be terribly surprised by the profit warning," Goldman Sachs analysts Tom Kim and Chun-pong Wu said in a note to clients on Friday.
The company's key container business has been hit hard by a global slowdown in trade. NOL carried 21 percent fewer containers in the four weeks to March 6 versus a year ago.
Ron Widdows, chief executive of NOL, told the Financial Times earlier this month that container shipping faces a long recession because container lines have failed to cancel enough of the excess ships ordered during the sector's boom.
NOL suffered a net loss of $149 million in the fourth quarter, from a net profit of $196 million a year ago. It had earlier warned it expects to report a loss in 2009.
In November the firm laid off about 1,000 staff and shifted its headquarters to Phoenix, Arizona from Oakland, California to cut costs. [ID:nSIN50422].
The move followed the decision of APL, its container shipping unit, to cut capacity to Asia-Europe trade by about 25 percent and in transpacific trade by 20 percent, measures that could save $200 million in 2009.
The company said in its statement on Thursday that it the expected losses will come despite "increased cost savings and mitigation efforts undertaken by NOL." (Reporting by Saeed Azhar; Editing by Dhara Ranasinghe)
