Net profit for the first six months of 2018 was $48.3 mill, with revenue of $1,056.3 mill, compared with $30.8 mill, with revenue of $976.5 mill in 1H17.
The 2Q18 results included an $11.8 mill impairment taken on two bitumen tankers, reflecting the weak market conditions, while the first-quarter results benefited from tax-related one-time gains of $24.9 mill from the lowering of the US federal corporate income tax rate, and $8.2 mill from a Stolthaven joint venture.
Stolt Tankers reported an operating profit of $26.5 mill, which included a $9.2 mill gain on bunker hedges, compared with the 1Q18 result of $10.9 mill, which included a bunker hedge loss of $0.3 mill.
Stolthaven Terminals reported an operating profit of $20.2 mill, down from $25.9 mill. As noted above, the 1Q18 results reflected the impact of an $8.2 mill gain from a reduction in deferred tax liabilities in a joint venture. Excluding one-time items, operating income was flat.
Stolt Tank Containers reported an operating profit of $18.8 mill, up from $16.2 mill, as shipments grew by 7.6%.
Stolt Sea Farm reported an operating profit of $3.9 mill, down from $5.5 mill in 1Q18, or $2.4 mill versus $2.2 mill before the fair value adjustment of inventories.
Corporate and Other reported an operating loss of $20.9 mill, compared with a loss of $3.6 mill in the previous quarter. The loss in the second quarter reflected the $11.8 mill impairment related to two bitumen ships, losses on bitumen trading, and higher administrative and general expenses.
Commenting on the company's results, Niels Stolt-Nielsen, SNI CEO, said: "SNL's underlying operating results in the second quarter remained largely in line with our expectations. At Stolt Tankers, we have thus far successfully compensated for rising bunker prices through the bunker hedge programme, but rising bunker fuel costs continue to eat into tanker earnings, as spot rates have not yet fully responded to the increased cost of bunkers.
“At Stolthaven, excluding one-offs, operating results were flat. Stolt Tank Containers reported another strong quarter with solid underlying demand driving an increase in shipments. Stolt Sea Farm's performance continued to benefit from rising turbot prices, although caviar volumes remained below our expectations.
"Our outlook remains fundamentally unchanged. The chemical tanker market appears to have bottomed out, but rising bunker prices will continue to have a negative impact on earnings until spot freight rates begin to reflect the higher cost base.
“At Stolthaven Terminals, gradual improvements in performance are expected to continue, driven by higher utilisation and operational enhancements. At Stolt Tank Containers, the outlook remains positive as global tank container demand continues to grow, the seasonal summer slowdown notwithstanding. For Stolt Sea Farm, continued overall improvement is anticipated, driven by both firming turbot prices and efforts to expand the markets for our products," he concluded.
Norne Research said that the results beat consensus, but were broadly in line with its expectations.
Adjusted for bunker hedging and impairment EBIT came just on the stable $50 mill level, while the bottom line remained profitable in a bottomed-out chemical tanker market. The outlook was kept fundamentally unchanged.
Norne said that it would only make minor changes to its estimates following the report, as nothing was communicated to change its view.
During 2Q18 the last of Stolt Tanker’s newbuildings was delivered and the company is well prepared for the likely improvement in chemical tanker rates. Again, not a word about the previously announced idea of splitting the tankers was said, Norne advised.