Chemical tankers are sailing into another challenging year, according to Stolt-Nielsen’s Chief Executive Officer, Niels G. Stolt-Nielsen.
“Our outlook for the first half of 2018 remains essentially unchanged. We do not anticipate any substantial improvement in the chemical tanker market until 2019 when the orderbook reduces and the supply/demand balance improves,” Stolt-Nielsen said while commenting on the company’s fourth-quarter results and the outlook for 2018.
The group’s tanker business, Stolt Tankers, reported an operating profit of USD 20.4 million for the fourth quarter of 2017, down from USD 30.4 million reported a year earlier, mainly reflecting the impact of lower contracts of affreightment (COA) volume and freight rates.
The quarter was negatively impacted by Hurricane Harvey, which closed down the Houston ship channel, disrupted cargo operations and affected onward voyages well into the fourth quarter.
The company’s terminals business also reported a lower operating profit which stood at USD 5.4 million in Q4, down from USD 14 million in the same quarter in 2016. The current quarter included a USD 8.4 million one-time impairment of assets in Stolthaven New Zealand.
The only gainer in the quarter was Stolt Tank Containers which posted an operating profit of USD 17 million, up from USD 15.1 million, driven by stronger markets, increased demurrage revenue and improved margins.
“For Stolthaven Terminals, we continue to expect a modest but steady improvement in results, driven by operational improvements and better utilization. At Stolt Tank Containers, we expect continued strength in rates and margins,” Stolt-Nielsen added.
Overall, the total net profit attributable to shareholders in the fourth quarter was USD 1.1 million, down from last year’s USD 22.8 million profit, while revenue reached USD 506.8 million.
Net profit for the full year came at USD 50.3 million, halved from last year’s USD 113 million.
The company said it stands to benefit from the US tax cuts which entered into force on January 1, 2018. Namely, a positive one-time impact of USD 25 million on SNL’s first-quarter 2018 results is expected, as net deferred tax liabilities will be lower.