Company Name: NEPTUNE ORIENT LINES LIMITED
| Research House: OCBC | Price Call: SELL | Target Price: 1.02 |
OCBC Investment Research has downgraded Singapore container shipping firm Neptune Orient Lines (NOL) (NEPS.SI) to sell from hold and lowered its target price to $1.02 from $1.63.
NOL posted a net loss for the second consecutive quarter and said it expects to report a full-year loss if conditions in the shipping industry do not improve. The firm reported a US$57 million ($69 million) net loss in the second quarter, hit by falling freight rates and soaring fuel price.
OCBC said that in the first half, NOL's average revenue per forty-foot equivalent unit fell 3.5 percent year-on-year as stronger competition among carriers and poorer utilisation levels resulted in a significant decline in freight rates.
Weakened trade demand and downward pressures on freight rates are likely to remain, barring any positive improvements, OCBC added.
At 11:16 a.m., NOL shares were down 2.6% at $1.14. The stock has fallen around 48% so far this year.
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