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Tanker company Stolt-Nielsen’s second quarter results do not reflect the increase in revenue. Despite historic demand side growth, excess supply from new ships entering the market puts pressure on rates.

Stolt-Nielsen has reported a net profit in the second quarter of 15.6 mill. [ds_preview]$, with revenue of 500.8 mill. $, compared with a net profit of 15.2 mill. $, with revenue of 475.7 mill. $, in the first quarter of 2017. Net profit attributable for the first six months was 30.8 mill. $, with revenue of 976.5 mill. $, compared with 68.2 mill. $, with revenue of 942.8 mill. $, in the first half of 2016.

Stolt Tankers reported an operating profit of $27.6 million, compared with 28.5 mill. $, reflecting continued softness in the chemical tanker market, as rates overall edged lower and bunker prices continued to rise.

Stolthaven Terminals reported an operating profit of 16.1 mill. $, down from 16.7 mill. $, primarily reflecting lower utilisation at the Singapore terminal. Stolt Tank Containers reported an operating profit of $13.7 million, up from 9.0 mill. $.

Stolt Sea Farm‘s operating profit was 0.7 mill. $, compared with a profit of 2.2 mill. $ in the peak holiday sales period. Corporate and Other reported an operating loss of 8.2 mill. $, compared with a loss of 4.6 mill. $, reflecting legal and other reorganisation expenses, higher administrative and general expenses, and lower earnings from joint ventures.

Softening of the chemical market continues

Niels G. Stolt-Nielsen
Niels G. Stolt-Nielsen (Photo: Stolt-Nielsen)

Commenting on the Company‘s results, CEO Niels G. Stolt-Nielsen said: »SNL‘s second-quarter results were disappointing overall, but in line with both our expectations and our results in the first quarter, as the fundamentals of our markets remained largely unchanged. At Stolt Tankers, the softening of the chemical market that we have seen since the third quarter of last year continued, but at a slower rate. While the demand side growth remains at historical levels, the pressure we see on rates is a result of excess supply from new ships entering the market.«

»Our outlook remains cautious. We do not expect a significant improvement in the chemical tanker market until most of the current orderbook has been delivered, which, barring any new orders, is expected to be in the second half of 2018. For Stolthaven Terminals, we expect gradual improvements in earnings going forward, and for STC we expect market conditions in line with those of this latest quarter.«