NOL

NOL: Macquarie maintains Underperform, with TP $0.95. Notes difficult conditions in 2013, while supply is set to accelerate in 2013 to 8-10% yoy growth, vs demand growth of 4-5%. Nevertheless, NOL’s recurring US$500m cost savings target appears to be on track. Believes NOL will continue to focus on taking out costs next year to improve profitability. NOL’s fleet renewal program is expected to further transform its cost structure in 2013, while charter-in ratio will drop to 30%, lowering its unit costs and operating lease expense significantly. On rate outlook, Transpacific contract to catch up. The house cuts FY12e net profit forecast from a net loss of US$223m to a net loss of US$289m as 4Q12 volume is weaker than expected, but lifts FY13e net profit estimate from US$58m to US$229m to account for US$196m of disposal gains from the sale of the HQ building but leaves core earnings unchanged.