NOL charts new direction

Its strategy now is chartering 70% of overall capacity, making it flexible to reduce fleet count during a slowdown.

Phillip Securities Research noted:

With the large amount of orders placed, we see a significant change in strategy for NOL. The company currently charters 70% of their overall capacity, which gives them slightly more flexibility to reduce their fleet count during a slowdown. However, this exposes them to increases in charter rates during periods of economic expansion. With 40% of their charters expiring over the next few years, we expect NOL to own 55% of their overall capacity by the end of FY13. In using larger vessels, NOL would also be able to achieve better economies of scale by lowering their average unit costs.
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