Market still challenging - Odfjell

Feb 16 2018

Odfjell reported net results of $96 mill for the fourth quarter of last year, compared to minus $11 mill in the previous quarter.

Included in the 4Q17 net result was a capital gain of $136 mill and impairments totalling a negative $43 mill.


EBITDA for 4Q17 was $41 mill, compared with $37 mill in the previous quarter.


The concluded sale of Odfjell Terminal's Singapore facility contributed $150 mill in cash, of which $117 mill were transferred to Odfjell.


During the quarter, Odfjell signed a framework agreement with Sinochem for the establishment of a chemical tanker pool to be managed by Odfjell.


Odfjell said that the results reflected a challenging chemical tanker market with some seasonal improvements. The market for terminals improved slightly compared to 3Q17.


"Our markets have remained challenging in 4Q, but Odfjell continues to make good progress. We have recently achieved our growth ambitions by renewing our fleet and participating in the consolidation in a capital efficient way, and we have at the same time strengthened our balance sheet through disposal of non-core assets,” said Kristian Mørch, Odfjell CEO.


Norne Research commented that both the tankers and the terminals showed continuous progress.


The challenging chemical tanker market is expected to continue into 2018, however Odfjell also expected this year to be a turning point, due to improving fundamentals.


Norne said that its estimates would not change much, following this report, but its  positive stance should be retained, as it sees the company handling the difficult period rather well.


The positive development in tankers ($213 mill revenues versus $208 mill in 3Q17 and $210 mill from Norne’s expectations) was due to stronger contributions from regional fleets, although Hurricane ‘Harvey’ still negatively impacted the rates on vessels loading in the US Gulf region.


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