Freight rates were stable compared to the previous quarter, the company said.
Chemical tanker earnings were seasonally weaker in 3Q19. Volumes were lower, but freight rates remained stable and with a firmer underlying trend.
Overall, Odfjell reported an EBITDA of $51 mill, compared with $57 mill in 2Q19.
Odfjell Tankers’ EBITDA of $45 mill, compared with $50 mill in 2Q19.
Odfjell Terminals posted an EBITDA of $6 mill, the same as reported for the previous quarter.
A net result of minus $1 mill, compared to minus $10 mill in 2Q19. Adjusted for sales gain, net results were minus $15 mill in 3Q19.
Spot rates on the main trade lanes increased by 2%, compared to 2Q19.
“The third quarter was impacted by the usual seasonal slowdown in volumes while rates remained stable. Since then, the market has normalised and we are encouraged to see improvement in volumes and improved crude and product tanker markets, which should positively impact our markets going forward.
“We are further encouraged by ongoing improvement in contract rates and that customers are accepting pass-through of potentially higher bunker costs related to IMO2020. We expect to report improved results in the fourth quarter,’’ said CEO Kristian Mørch.
Norne Research commented that 3Q19 was a seasonally weaker quarter for chemical tankers and the results adjusted for the sale of terminal in Jiangyin fell somewhat short of our projections.
The company is looking for an improvement in 4Q19, while the long term positive expectations towards market development remains, therefore, we are likely to keep our ‘Buy’ recommendation for the stock on little changes to estimates.
Odfjell took delivery of the company’s first super-segregator newbuilding (49,000 dwt) from Hudong during 3Q19, which is the largest stainless steel chemical tanker built to date. The second newbuilding is scheduled for delivery in November and the third in February, 2020.
In total, seven vessels should be delivered by end-2020.
On the IMO2020 side, the technical operations are progressing according to plan, while the renewed contracts include the bunker adjustment clause in relation to increased prices.