Odfjell’s Loss as Expected

Norwegian ocean transportation company Odfjell SE said in its second quarter results that its Chemical Tankers had an EBITDA of USD 24 million, compared with USD 17 million in the first quarter.  The company recorded improved utilisation with only minor interruptions of trade, with improved time-charters by 10%.

Odfjell’s shareholding in the tank terminals business delivered an EBITDA of negative USD 10.0 million in the first half of the year, heavily impacted by a re-organisation charge at its terminal in Rotterdam in May of USD 11.8 million.

The effect of the re-organisation is a significantly improved cost base for the terminal going forward.

According to Odfjel, with the exception of the tank terminal in Rotterdam, the terminal results were overall in line with expectations. Adjusted for one-off charges at Odfjell Terminals (Rotterdam), Odfjell Terminals EBITDA was USD 1.8 USD million compared to USD 0 million in first quarter.

“Our ongoing cost-cutting and efficiency review to provide for a more competitive cost structure indicates potential for significant improvements. Key decisions will be made in fourth quarter,” the company said.

“The US trade picture has brightened considerably in recent months as imports has increased to a record high as the economy improved and consumers unleashed pent-up demand. European economies are weakening as escalating tensions with Russia appears to impair Europe’s fragile recovery. Oil markets are currently softer with prices sliding to the lowest levels for more than a year. The main forecasting agencies suggest reduced demand and a well-supplied market.

We expect third quarter of 2014 to be in line with second quarter for our chemical tankers. With regard to terminals, we expect continued stable results and gradually also improving results at our terminal in Rotterdam,” Odfjell added.

In May Odfjell took delivery of the second of four coated chemical tankers from the Hyundai Mipo yard in South Korea. The two remaining vessels are expected to be delivered in the fourth quarter.

Vessels number one and two are on long-term bareboat charters to Odfjell while the two remaining units will be fully owned by the company.

“Following our joint venture agreement with Break water/Oak Hill, we exercised the option and confirmed the order for four 22,000 cbm LPG/Et hylene gas carriers at Nantong Sinopacific in China. The vessels are scheduled for delivery between September 2016 and June 2017. Odfjell Gas consequently now has eight LPG/Ethylene vessels on or er at this yard. The first order of four 17,000 cbm LPG/Ethylene gas carriers at Nantong Sinopacific is scheduled for delivery between October 2015 and May 2016.”

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Press Release, August 25, 2014