Odfjell Deeper in Loss

As the challenging market for chemical tankers persisted, Norwegian shipping and tank terminal company Odfjell widened its net loss to USD 11 million in the third quarter of this year from a loss of USD 5 million seen a quarter earlier. 

The results were also impacted by the market for terminals which was under pressure from falling forward prices of oil/products.

EBITDA for the period was USD 37 million, compared to USD 41 million reported in the previous quarter of 2017.

During the quarter, Odfjell sold its 50% ownership share in Singapore terminal for USD 150 million. The sale, which is likely to close in the fourth quarter of 2017, is in line with the company’s strategy to focus on the terminals where Odfjell has managerial control over the assets and further invest in growth opportunities in its core markets.

“3Q was a challenging quarter for our tanker and terminal divisions. Our balance sheet remains robust and our competitiveness continues to increase, so we are positioned to benefit once our markets recover. The sale of our Singapore terminal in line with our strategy will result in a significant gain,” Kristian Mørch, CEO of Odfjell SE, commented.

Odfjell Terminals’ EBITDA dropped to USD 9 million in the third quarter of 2017 from USD 10 million recorded in the second quarter of this year.

In addition, Chemical Tankers’ EBITDA was USD 28 million in Q3, compared with USD 31 million posted in the previous quarter.

Odfjell said it continues to pursue an exit from the gas sector, where the two existing LPG carriers are assets held for sale. In Q2, Odfjell Gas reached a cancellation deal for the last two of the 22,000 cbm vessels and all installments have now been refunded.

As informed, Odfjell has completed its basic fleet renewal program. The first three owned vessels, Bow Neon, Bow Palladium and Bow Compass, were delivered to the company’s fleet in late Q2 and during Q3.

The newbuilding portfolio comprises six vessels from Hudong shipyard in China and five vessels from AVIC Dingheng shipyard in China, of which two were delivered in Q3.

With respect to prospects, Odfjell said:We are in the middle of peak delivery of new vessel supply, which impacts the market short term. We continue to believe that chemical tanker markets will gradually improve through 2018 as tonne-mile demand is expected to outgrow net fleet growth.”

“We expect Q4 2017 results to be in line with Q3 2017,” the company added.

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