Stolt-Nielsen Improves Results, Fears Newbuilding Cancellations
Oslo-listed Stolt-Nielsen Limited has issued a guarded outlook for Stolt Tankers despite improved operating results in the first six months of 2016, saying that the division might be facing delays and cancellations of newbuildings.
The company reported its net profit at USD 37.8 million for the second quarter ended May 31, 2016, up from a net profit of USD 30.4 million seen in the first quarter of the year.
The revenue for the period also increased to USD 478.9 million, from USD 464 million seen in the first quarter of 2016.
The company said that the net profit for the first six months stood at USD 68.2 million, with revenue of USD 942.8 million, compared with USD 81.2 million, and revenue of USD 988.4 million, in the first half of 2015.
“Stolt Tankers’ results continued to improve in the second quarter, driven by a combination of increased COA volumes and the positive impact of bunker hedges that we placed earlier this year. Stolthaven Terminals also reported improved results, from higher utilisation and cost-saving initiatives. At Stolt Tank Containers, shipments, utilisation and revenue were all up this quarter, but price competition held down operating income,” Niels G. Stolt-Nielsen, Chief Executive Officer of Stolt-Nielsen Limited, said.
“Going forward, we remain guarded with respect to the outlook for Stolt Tankers in 2017 and 2018. The orderbook stands at 27% of the existing fleet, but it remains unclear how this will ultimately play out, as some delays and cancellations of newbuildings seem increasingly likely. Also, higher exports of certain commodity chemicals from the U.S. Gulf are pulling tonnage out of our niche market in specialty chemicals, thus helping to maintain our freight rates,” Stolt-Nielsen added.
Stolt Tankers reported an operating profit of USD 45.3 million, compared with USD 31.2 million, reflecting increased contract of affreightment (COA) volume and a USD 6.5 million gain on bunker hedges.
The company’s Stolthaven Terminals reported an operating profit of USD 13.8 million, up from USD 10.5 million, driven mainly by improved utilisation and the results of cost saving initiatives, while Stolt Tank Containers’ operating profit was at USD 10.7 million, down from USD 11.8 million.