Postponed Newbuild Deliveries Dampen Odfjell’s Surge in Q3

The deliveries of the four 17,000 cbm LPG/Ethylene carriers ordered by the Bergen-based Odfjell at China’s Nantong Sinopacific Offshore & Engineering back in 2013 will be significantly delayed, the company revealed in its financial report for the quarter ended September 30, 2015, without specifying any reasons for the delay.

The delayed carriers were initially scheduled for delivery between October 2015 and May 2016, the Norwegian operator of chemical tankers, gas carriers and tank terminals said. Odfjell has four more 22,000 cbm LPG/Ethylene carriers under construction at the same shipyard, scheduled for delivery between September 2016 and June 2017. The overall value of the newbuild contracts is around USD 380 million.

The delay in deliveries of the newbuild carriers was announced against the backdrop of Odfjell’s financial results for the third quarter of 2015, marked by the company’s return to black despite a falling revenue.

The Oslo-listed company posted USD 7 million net profit, on par with the Q2 2015 result, but a major improvement compared to USD 9 million net loss recorded in the third quarter of 2014.

The third quarter net profit offered some respite for the company, reducing the net loss for the first nine months of 2015 to USD 18 million. The company posted USD 57 million loss for the same period a year earlier.

Looking ahead, Odfjell expects the fourth quarter of 2015 to be weaker than the third quarter for the company’s chemical tanker division on a slightly softer market.

Odfjell Gas AS saw a higher-than-expected slowdown in the market which resulted in more idle time for the pool vessels. The gas carrier operator expects the market to improve in the fourth quarter and reach the levels seen in the first half of the year.

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