Pressures mount for NOL as net losses hit $29.7m in Q3

Headwinds will sustain in the near term.

Neptune Orient Lines weathered choppy seas in Q3. The mainboard-listed shipping and logistics company reported a net loss of $29.7m (US$23.1m) in Q3, a significant reversal from its 3Q13 PATMI of $25.7m (US$20.0m).

According to OCBC, pressures on freight rates will not ease anytime soon and trade volume in 2015 will not be encouraging.

“NOL’s 9M14 net loss of US$174.8m suggests our FY14 forecast net loss of US$268.7m could be overly conservative. Also, NOL’s logistics segment saw an 8% increase in revenue to US$399m. We lower our revenue projections by 2.0% and 3.52% for FY14 and FY15 respectively. Consequently, we lower our FV from S$0.90 to S$0.84 based on a lower 0.92x FY14F P/B (one standard deviation below its 3-year historical P/B average),” noted OCBC.