Tuesday, September 20, 2011


NOL: Aug operating data weak.
Headline freight rate fell 20% YoY and was flat MoM. This is weaker than China Containerised Freight Index (CCFI), which fell 18% YoY but rose 0.8% MoM in Aug. NOL’s volumes grew 8% YoY but were flat MoM. On an absolute basis, NOL’s volume was hovering at record-high levels.
Mgt noted there is no significant increase in its forward cargo booking for the next one month.

Meanwhile, peer AP Moeller-Maersk says it is struggling to raise peak season rates on the Asia-Europe shipping route, as an influx of new vessels leads to a glut in capacity. Notes, its current fleet utilisation at >90% on Asia-Europe routes, matching the global avg, means shipping lines have little incentive to slash capacity. This could spell further downside risk in rates, especially with new vessels arriving later this yr.

BNP also sees a gloomy container shipping outlook, particularly on the Asia-Europe route. Believes liners will find it difficult to raise freight rates in the last month of the peak season as load factor remains low, and sees possibility of another rate cut in the Nov weak season.

The Street has a mix of Buy, Hold and Sell ratings. Recent TP ranges btwn $0,77 – 1.65.

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