Oslo-listed shipowner Stolt-Nielsen reported a net profit of USD 22.2 million in the third quarter of 2016, down from USD 37.8 million seen in the second quarter of the year.
Revenue for the period slightly decreased to USD 474.1 million, from a revenue of USD 478.9 million reached in the previous quarter.
The company said that the net profit for the first nine months stood at USD 90.3 million, compared with a net profit of USD 111.3 million recorded in the same period a year earlier, while revenue for the respective periods was at USD 1.41 billion and USD 1.48 billion.
“Stolt-Nielsen’s third-quarter results were mixed. Stolt Tankers’ results were held down by weak summer demand, combined with the impact of Chinese production cutbacks and a weaker clean petroleum products (CPP) market, which pushed swing tonnage into the chemical tanker markets. As expected, the result was a reduction in volume with a corresponding softness in spot freight rates,” Niels G. Stolt-Nielsen, Chief Executive Officer of Stolt-Nielsen Limited, said.
Stolt Tankers reported a drop in operating profit to USD 31.4 million, compared with USD 45.3 million, reflecting lower deep-sea rates and reduced COA volume, and a loss on bunker hedges of USD 0.5 million, compared with a gain of USD 6.5 million in the prior quarter.
Stolthaven Terminals’ operating profit was at USD 14.8 million, up from USD 13.8 million, mainly due to improved operating performance at its wholly-owned terminals. As marginally lower trading results were offset by higher income from joint ventures Stolt Tank Containers’ operating profit was unchanged at USD 10.7 million, according to the company.
“It is difficult to forecast what the year ahead may bring. Volume growth has not kept pace with supply-side growth, a situation made more acute by the recent influx of CPP swing tonnage. On the demand side, the weak return volumes from China and the Far East are likely to continue,” Stolt-Nielsen said, adding that they believe the decline in rates and the margin squeeze “will soon bottom out.”