The Bergen-based company reported an EBITDA of $61 mill and a net result of $16 mill in second quarter of 2016, compared to an EBITDA of $69 mill and a net result of $24 mill in the previous quarter.
First half 2016 EBITDA was $129 mill, compared to 1H15 EBITDA of $88 mill. The balance sheet also continued to strengthen, the company claimed.
"Our markets are currently challenging, but we are pleased to see that the increased competitiveness of Odfjell means that we continue to generate positive results," said Kristian Mørch, Odfjell CEO.
The chemical tanker spot market was softer in 2Q16, however, utilisation remained high due to stable contract nominations and agility in the spot market.
EBITDA for the chemical tanker segment was $48 mill in 2Q16, compared to $56 mill in 1Q16.
Morch confirmed that Odfjell had signed a Letter of Intent with a state-owned Chinese shipyard to build four firm stainless steel super segregators. A firm contract was expected to be signed in 2H16 and the capital commitments will be around $240 mill.
Odfjell's shareholding in the tank terminal sector delivered stable results. EBITDA was $12.1 mill in 2Q16, basically flat from $11.9 mill recorded in the 1Q16. The occupancy rate of commercially available capacity was 97%, compared to 98% in the previous quarter.
The two first vessels in Odfjell Gas' newbuilding programme have been cancelled and all paid instalments have been returned by the guarantor.
Norne Research said in a note that the analysts had expected a decline in revenues quarter on quarter, but it came even lower than projected ($205 mill vs $210 mill).
This was due to the softer chemical tanker market, while terminals generated stable revenues. However, a solid net profit marked the best six months since 2008.
Odfjell said there will be a slight reduction in revenues from chemical tankers in 3Q16, mainly due to generally softer market. Furthermore, it was noted that the supply of ships is increasing, thus, the markets are under pressure. Terminals are forecast to remain stable for the remainder of 2016. A terminal in China is still waiting for a permit to operate and will start working as soon as it will be received, Norne advised.
While Odfjell will likely cancel its remaining LPG carrier orders, it was announced that a letter of intent was signed for construction of a series of four firm stainless steel parcel tankers to strengthen chemical tanker fleet.
After a solid report and in-line figures, Norne said that it expected the company to continue strong throughout the year and will likely keep its ‘Buy’ recommendation with minor changes to the model.