Odfjell Falls to Loss in Q2 amid Chemical Tanker Woes
The weaker spot market for chemical tankers has pushed Norwegian shipping and tank terminal company Odfjell SE to a net loss in the second quarter of 2017.
However, Odfjell said that its contract portfolios in both chemical tankers and terminals continue to soften the impact of the challenging markets.
The company swung to a net loss of USD 5 million compared to USD 2 million in the previous quarter.
Odfjell’s EBITDA stood at USD 41 million, also down when compared to USD 46 million in 1Q 2017.
“We are not satisfied reporting a net loss for the quarter, but our operational performance remains strong. The CTG transaction completed our current growth ambitions and ensures that Odfjell can continue to offer competitive and efficient service to our customers,” said Kristian Mørch, CEO of Odfjell SE.
With respect to prospects, Odfjell SE said it expects 3Q 2017 results to be marginally lower than 2Q 2017, but the second half of the year to be in line with the first half.
“We reiterate our view that our markets for both chemical tankers and terminals will remain challenging in 2017,” the company pointed out.
“In the medium term, we believe the current oversupply of tonnage in chemical tankers to gradually be absorbed by stronger tonne-mile demand.”
During the quarter, Odfjell completed acquisition of 5 vessels from Chemical Transportation Group (CTG) and the establishment of a respective pool, as it closes in on achieving the target of operating 100 vessels.
Odfjell took delivery of the first vessel in mid July 2017 and the remaining 4 newbuildings will be delivered in intervals up until May 2018. The purchase price per vessel is USD 40 million and will be paid upon delivery from the yard, the company said.
Furthermore, it has received the final refund from the cancellation of eight 22,000 cbm gas carriers in Odfjell Gas.
Odfjell has in total received USD 38 million in refunds including interests. The company’s activity in Odfjell Gas is now limited to the two existing 9,000 cbm gas vessels.
Separately, the company said it has received high interest from “numerous potential buyers” for the potential sale of its share in Oiltanking Odfjell Terminals Singapore.
In addition, Odfjell SE sold its 35% indirect ownership share in the Exir Chemical Terminal (ECT), generating USD 6 million in cash.
Odfjell Terminals delivered an EBITDA of USD 10.4 million in the second quarter of 2017, against USD 9.4 million in the previous quarter.