I am very weak in the area of business. Yet, I want to understand them, because

Question

I am very weak in the area of business. Yet, I want to understand them, because they always come out in the news report.

I want to know what this is trying to say:

Weak Freight Rates Send NOL Tumbling to Deep Loss (I don't know what NOL means and i believe freight rates are transporting those things to another country but how does raising those prices ruin something?)

HONG KONG — NOL’s third-quarter results were awash in red ink as the Singapore-listed company reported a third quarter net loss of $96 million, down 300 percent compared to the same period last year as rate levels tumbled on the major trades.

The parent of container line APL posted core earnings before interest, taxes, depreciation and amortisation (EBITDA) of $21 million, down 81 percent year-over-year. Its cost-savings programme was a rare bright spot, yielding $80 million and bringing the total year-to-date savings to $335 million. (what is APL and I have no idea what this is saying here!)

“The absence of the traditional third-quarter peak season in Europe and North America led to severe freight rates erosion in major trade lanes,” NOL Group President and CEO Ng Yat Chung said.

“We continued to make good progress in managing costs. Unfortunately, this was more than offset by weak global demand and huge contraction in freight rates.”

Those weak freight rates dragged down earnings in the crucial revenue-per-TEU segment that at $1,847 was a 21 percent decline compared to the third quarter of last year. The line carried 577,000 TEUs during the three months, a drop of 11 percent year-over-year.

APL attributed the volume contraction to various reasons, including a significant drop in U.S. exports and weak demand in the intra-Asia short-sea market. The line also voided sailings in response to weak global demand and trimmed capacity in unprofitable trade lanes, allowing it to maintain a high headhaul utilisation of above 90 percent.

The NOL statement said APL had maintained its rigorous cost management as well as a yield-focused trade strategy that emphasised network rationalisation and better cargo selection. Six chartered ships were returned in the third quarter, and as a result, total cost of sales per 40-foot container fell 17 percent year-over-year.

“NOL will continue to drive cost excellence and yield optimisation. The group’s balance sheet has strengthened and we will invest when the conditions are right,” Ng told investors.

I think I have no idea what this article is saying. Nor do I know what NOL or APL or all this stuff is.

I am dedicated to learn but I can't if I have no idea what this article is about.

Explanation / Answer

NOL and APL are the name of two group companies. and yes freight is been transportation charges from one place to another but head line of article means that company income is from freight ie it works as transportation company whose incoem is from freight only.

it says that NOL 3rd quarter is facing a loss of $96 million and this loss shows that there is a decline of 300 % from last year during same quarter

In APL also EBITDA there is only $21 million which also decreases by 81% and savings of company also decreased and remained only 335b million.

Due to less tarde in traditional quarter in Europe and North America, its impact also effects freight charges in other tardes also, because all transporters are free so freight charges reduced as any trasporter will be ready to go at lesser charges, and income of NOL effected.

As decline in freight rates arosed due to whcih income also reduced by 21 % from last quarter.

APL focused only where it can get higher returns and able to utilize its capacity and also able to reduce its cost of sales, as NOL will able to cost excellence an =e yeild optimization due to which overall group balance sheet strenthened.

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