Oslo-listed Stolt-Nielsen Limited posted second quarter net profit attributable to shareholders of USD 15.6 million, with revenue of USD 500.8 million.
The results are in line with the levels from the first quarter this year when the company reported a net profit of USD 15.2 million, with revenue of USD 475.7 million.
“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,” Niels G. Stolt-Nielsen, Chief Executive Officer of Stolt-Nielsen Limited, said, commenting on the company’s results.
Net profit for the first six months stood at USD 30.8 million, with revenue of USD 976.5 million, halved when compared to USD 68.2 million in the first half of 2016.
Stolt Tankers reported an operating profit of USD 27.6 million, down from last quarter’s USD 28.5 million and last year’s USD 45.3 million, reflecting continued softness in the chemical tanker market, as rates overall edged lower and bunker prices continued to rise.
As explained by the company’s CEO, the softening of the chemical market 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,” Stolt-Nielsen added.
Freight rates overall were down by 0.7%, as a 7.4% percent increase in spot rates was more than offset by a 3.7% decrease in contract of affreightment rates, excluding bunker surcharges. The improvement in spot rates was mainly attributable to a shift in the cargo and trade-lane mix rather than an improved market, the company said.
Stolthaven Terminals reported an operating profit of USD 16.1 million, down from the first quarter’s USD 16.7 million, primarily reflecting lower utilisation at the Singapore terminal.
The company singled out Stolt Tank Containers as the bright sport of the quarter having reported an operating profit of USD 13.7 million, up from USD 9 million, as markets firmed after the seasonally weak first quarter.
“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,” Stolt-Nielsen concluded.
In May, the company’s subsidiary Stolt-Nielsen Gas (SNG) inked a deal with Keppel Singmarine for the construction of two 7,500 cbm liquefied natural gas (LNG) carriers, with options to purchase three additional similar ships, worth USD 80 million.
SNG has established a wholly owned subsidiary, Avenir LNG Limited, to focus on the development of small-scale LNG supply chains serving “stranded demand,” where off-the-grid customers lack access to natural gas. The newbuildings would be deployed, at least in part, in the supply chains serving these projects.