Stolt-Nielsen’s results flat

Oct 04 2019

Stolt-Nielsen Limited (SNI) has reported a net profit of $3.7 mill for the third quarter of this year with revenue of $519 mill, compared with a net profit of $3.6 mill, with revenue of $518.9 mill recorded in the second quarter.

Net profit for the first nine months of 2019 was $15.2 mill, with revenue of $1,539.9 mill, compared with $51.3 mill, with revenue of $1,599.4 mill in the first nine months of 2018.

Highlights for the third quarter of 2019, compared with the second quarter of 2019, were:

•   Stolt Tankers reported an operating profit of $15 mill, up from $12.8 mill, mainly reflecting the impact of lower operating costs.

•   Stolthaven Terminals reported an operating profit of $19.5 mill, compared with $19.7 mill, as markets remained stable.

•  Stolt Tank Containers reported an operating profit of $12.1 mill, down from $12.6 mill, reflecting continued softness in markets overall.

•   Stolt Sea Farm’s operating profit before the fair-value adjustment of inventories was $2.1 mill in 3Q19, up from $2 mill in 2Q19.

•    Corporate and Other reported an operating loss of $2  mill, compared with a loss of $2.1 mill in the previous quarter.

On 28th September, an explosion and fire occurred on ’Stolt Groenland’, while the ship was berthed in Ulsan, South Korea. Niels Stolt-Nielsen, SNI CEO, said: “We deeply regret the impact of this incident on the people that were in the vicinity of our vessel and hope for the speedy recovery of those injured. As always, safety remains our number-one priority in all that we do, and we are actively co-operating with the investigations now underway to determine the cause of this incident.” (see elsewhere)

Commenting on the company’s results, he said: “Stolt Tankers’ third-quarter results were flat, supporting our belief that the chemical tanker market has bottomed out. Stolthaven’s results also held steady for the quarter. At Stolt Tank Containers, shipments were down slightly, and we are observing continued softness in markets along with price competition. Excluding the impact of fair-value adjustments, Stolt Sea Farm’s results were in line with those of the prior quarter.

“Looking ahead, with deliveries of new tonnage slowing, we expect the tanker market to slowly turn. At Stolthaven, we expect continued improvements in our results, driven by increased capacity and enhancements in operational performance and efficiency. At Stolt Tank Containers, the cyclical strengthening of tank container markets that we typically see at this time of year did not materialise, reflecting the combined impact of the US/China trade war, a softening of global economic conditions overall, and an oversupply of tank containers.

“The implementation of the IMO2020 regulations to reduce sulfur oxide emissions is now less than three months away. Based on discussions in recent contract renegotiations, we expect to recover the increase in our fuel costs through bunker-surcharge clauses, thanks to a shared understanding among all parties that it is economically unfeasible for the shipping industry to absorb these costs,” he concluded.

SNI has also announced the appointment of Lucas Vos as Stolt Tankers President, with effect from 11th October, 2019.

Vos succeeds Mark Martecchini, who will assume management of the division’s shipowning team and ongoing responsibility for Stolt Tankers’ business transformation programme.

He spent 12 years at Nedlloyd Lines and subsequently P&O Nedlloyd in various management roles until it became a part of Maersk.

From 2008 to 2013 he remained at Maersk Line, Denmark where he was the Executive Board member overseeing IT, HR, strategy, and its global service centres. His most recent role with Maersk was as Chief Commercial Officer for Maersk Line.

In 2014, he returned to his home country of the Netherlands where he spent four years as CEO at the co-operative Royal FloraHolland.

Vos is also Chairman of the Supervisory Board at Royal Coster Diamonds and a member of the Supervisory Board at Jeroen Bosch Ziekenhuis and Royal Wagenborg.

Commenting on the results, Norne Research said that they showed no surprises and was in line with earlier estimates.

There was little fluctuation in all of the segments, while the outlook also remained unchanged.

As for the Ulsan incident, previously the company had talked about a $1 mill impact on the 4Q19 figures, and Norne said it will adjust its model accordingly.

As a result, Norne’s long term ‘Buy’ recommendation is likely to be reiterated, the analyst said.


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