Odfjell Tankers recorded an EBITDA of $40 mill, compared with $27 mill in 4Q18. Adjusted EBITDA improved to $27 mill in the quarter from an adjusted EBITDA of $23 mill in 4Q18.
The rise was due to the improvement seen in chemical spot rates, compared to the previous quarter, the company said. Spot rates improved by 16% in main trade lanes, compared to 4Q18. However, this was partly offset by fewer revenue days compared to 4Q18.
Contract coverage was reduced to 50%, compared to 59% in 4Q18 as Odfjell said it did not aggressively pursue contracts at historically low rate levels.
Odfjell Terminals posted an EBITDA of $7 mill, compared to $5 mill in 4Q18.
"The chemical tanker markets improved in the first quarter. We expect this trend to continue as a result of the strong fundamentals in our markets and a firming tanker market in general. We decided not to aggressively pursue or extend contracts at the historically low markets at the end of 2018. This reduces our COA portfolio, but also increases our exposure in the firming market. We expect to continue improving our performance in the coming quarter," Kristian Mørch, Odfjell CEO, said.
Norne Research commented that the figures were broadly in line with its and consensus estimates and marked a slow start of a year of recovery.
Overall, nothing extraordinary was announced, the analyst said.
Strong exports from the US and Middle East were the key chemical tanker drivers, while there was also less supply pressure from swing tonnage, however some increased competition towards the end of 1Q19 was experienced.
The chemical tanker market is expected to further improve and Odfjell Tankers result was guided to grow in 2Q19. More movement should be seen in the Terminal segment, where the headquarters should be moved from Rotterdam to Bergen resulting in reduced costs.
Lindsay Golberg has initiated the sales process of its 49% shareholding in Asian Terminals, while the US transaction with Northleaf Capital Partners is expected to close during 1H19. Future investments plans in US terminals will be reviewed as soon as this transaction is completed.