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SINGAPORE: Singapore's Neptune Orient Lines (NOL) said Wednesday it expected a sharper and longer downturn for the container shipping industry as it announced an 82 percent drop in its third quarter net profit.
For the three months to September, net profit was US$35 million, down from 191 million in the same period of 2007, due to falling demand, the company said in a statement.
The container shipping, terminals and logistics company said revenue was up 16 per cent to 2.35 billion dollars.
"Reduced demand in key trade lanes, combined with cost increases and worsening global economic conditions have adversely impacted our profit performance in the third quarter," said NOL group president and chief executive Ron Widdows.
"It is reasonable to expect a more pronounced and prolonged downturn than previously forecast for the container shipping industry," the company added in a statement.
"Although the NOL Group has been profitable in the first three quarters of the year, an operating loss is expected for the fourth quarter," NOL said.
The current financial market turmoil and uncertain global economic outlook were expected to "lead to lower demand for container shipping services and reduced shipment levels and vessel utilisation," NOL said.
Shipments of retail goods, electronics products and cars were likely to be scaled back in the coming months, it said.
Widdows said NOL's container shipping business, APL, saw a 10 per cent year-on-year rise in volumes, "but overall demand in the main trades slowed considerably."
He said NOL would reduce capacity between Asia and Europe by close to 25 per cent and 20 per cent for the trans-Pacific route, while key changes were also underway in the intra-Asia trades.
- AFP/yt
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