Neptune Orient Lines is forecasting a hefty $240m first quarter loss after a sudden contraction in the container trades during the early weeks of the year.
Neptune Orient Lines is forecasting a hefty $240m first quarter loss after a sudden contraction in the container trades during the early weeks of the year.
The warning was contained in a brief statement to the Singapore Exchange on Thursday evening. Results will be published on May 12.
NOL posted a loss of $149m for the 2008 fourth quarter, despite cost-cutting measures such as service withdrawals and vessel lay-ups.
While noting that the first quarter is a seasonally slower period, the Singapore company said deterioration was also due to worsening trade conditions.
NOL, which on Wednesday announced plans for an additional $250m-$300m in cost savings, bringing the annual total for 2009 to $500m-$550m, said that full year losses would be greater than previously anticipated.
?On the expectation of adverse business operating conditions continuing, NOL expects its full year loss to be significantly worse than financial analysts" current estimates,? the company said.
NOL president and chief executive Ron Widdows has already responded to the downturn by cutting his own pay.
As part of the savings drive, NOL chairman Cheng Wai Keung said Mr Widdows had volunteered a 20% reduction in remuneration from March, while the company"s directors are also cutting their fees by 20%. Mr Cheng is taking a 40% drop in his director"s pay, which was $165,887 last year.
Mr Widdows earned between $1.6m and $1.8m in 2008, of which 30% was salary and 11% was cash bonuses, with the rest consisting of equity incentives and benefits, according to the company"s annual report.
In the second four week period of 2009 to March 6, NOL"s volumes fell 21% year-on-year to 137,800 feu while average freight rates declined 16% to $2,382 per feu.
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