Norwegian shipping and tank terminal company Odfjell managed to improve its earnings in the fourth quarter of 2017.
For the three months ended December 31, 2017, the company posted a net income of USD 96.4 million, compared to a net loss of USD 10.5 million seen in 3Q 2017 and a net income of USD 43.5 million in 4Q 2016.
Although the chemical tanker market remained challenging, Odfjell reported EBITDA of USD 40.7 million, against USD 37.3 million in 3Q 2017 and USD 48 million in 4Q 2016. As explained, the development was driven by increased gross revenue due to increased trading days and stronger contributions from the company’s regional fleets.
“Our markets have remained challenging in 4Q, but Odfjell continues to make good progress. We have recently achieved our growth ambitions by renewing our fleet and participating in the consolidation in a capital efficient way, and we have at the same time strengthened our balance sheet through disposal of non-core assets,” Kristian Mørch, CEO of Odfjell SE, commented.
In December 2017, Odfjell Terminals closed the sale of its 50 percent stake in Singapore terminal. The sale contributed with USD 150 million in cash of which USD 117 million proceeds have been transferred to Odfjell.
Furthermore, Odfjell signed in November 2017 a framework agreement with Sinochem Shipping Singapore for the establishment of a pool of chemical tankers, managed by Odfjell. Odfjell will take four 40,900 dwt ships on long-term bareboat charters and holds purchase options for them. The ships are expected to be delivered during 2018 once the transaction is completed.
In its outlook for 2018, the company said: “We continue to believe that chemical tanker markets will improve towards the end of 2018 as tonne-mile demand is expected to outgrow net fleet growth. Any significant improvement is not expected until 2019.”
Odfjell added that storage demand for oil minerals is also expected to remain challenging.
The company plans to take delivery of twelve eco-friendly vessels during 1Q 2018. Currently, Odfjell’s fleet comprises a total of 79 chemical tankers with an aggregate tonnage of 2.4 million dwt.