Odfjell reports significant improvement

Feb 17 2017

Odfjell‘s results show significant improvement in financial performance in 2016 in spite of challenging markets, the company claimed.

Efficiency programmes continued to increase competitiveness and the balance sheet was substantially strengthened. 

For 2016, Odfjell reported net results of $100 mill, compared with a negative $36 mill in 2015, and an improved full year EBITDA at $238 mill, from $190 mill in 2015.

The 4Q16 results showed a stable underlying operational performance, but softer markets impacted the net result, which ended at $43 mill, including capital gains and impairments. 

"Our markets remained challenging, but Odfjell continues to build both financial and operational strength. Based on our strengthened position we are now launching our new strategy - the ‘Odfjell Compass’- which will be leading the company into the future," said Kristian Mørch, Odfjell CEO. 

Odfjell Tankers 4Q16 EBITDA was $36 mill, compared to $48 mill in 3Q16, due to a softer market.

Stable 4Q16 results were recorded for Odfjell Terminals, however the EBITDA was slightly reduced, due to increased maintenance and operating costs. The sale of the Oman terminal during the quarter resulted in a capital gain of $44 mill, while the Rotterdam tank terminal continued to improve.

In January, 2017, Odfjell successfully completed a new $700 mill unsecured bond issue.

Looking long term, Odfjell said that it believed the market was fairly balanced, but rates were expected to be under pressure in 2017, as the market absorbs new capacity.

The company expected the 1Q17 timecharter results to be in line with, or marginally better than 4Q16, and the 2017 Odfjell Terminals results to be improved on continued strengthened performance at the Rotterdam terminal.  

Norne Research said that although Odfjell’s revenues came in as expected ($204 mill versus $203 mill), increased costs significantly lowered EBITDA that came 21% lower than predicted.

The main driver for the weaker results was said to be a decrease in contract nominations and increased voyage expenses, due to rising fuel prices. The reduced contract nominations had the effect of increasing spot volumes.


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