Singapore Stock Market News

Neptune Orient Lines - Better than expected

StockFanatic
Publish date: Sun, 11 Aug 2013, 11:57 PM
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NOL's 1H13 core net loss of US$162m came in at 37% of our full-year loss forecast of US$427m, as we had underestimated the fruits of NOL's cost-saving initiatives. Although 2Q13 rates fell 11.5% yoy, the 8.9% yoy fall in unit costs significantly cushioned the impact.

We maintain Underperform on NOL, but raise our target price (still based on 1.1x CY13 P/BV, average since 2011) and FY13-15 EPS forecasts back to roughly the levels prior to our 26 July cut. We lowered unit costs in our model, but this was partly offset by reduced rate assumptions. Continued pressure on spot rates despite industry efforts to raise them could de-rate the stock.
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