NOL

NOL/ OOIL/ Shipping: DB highlighted that OOIL's FY12 profits beat its estimates, with a commendable EBIT margin of 5.3% and ahead of its peers in a generally tough year for the industry; net gearing remains healthy at 0.12x. OOIL's mgmt expect 2013 to be as difficult as 2012, as they expect a protracted period of low economic growth. While economic conditions in the US are improving, the pace of economic recovery remains slow and consumer demand continues to be muted. Prolonged deflation in Europe has caused a decline in imports from Asia. They expect a further increase in newbuild capacity delivering in 2013. Hence competition and the resultant pressure on freight rates will be intense. But mgmt do admit that losses in the industry in 4Q will cause some measure of rate restoration in the March and 2H 2013 is likely to be better than 1H 2013. DB think the liners will have some success in increasing freight rates over coming months. The poor results of Asian liners in 4Q will cause them to be disciplined, at least over the short term. House expect earnings growth for OOIL and the industry this year.