London-based transportation company Stolt-Nielsen Limited expects ‘a gradual upturn’ in the chemical tanker market as the year unfolds, the company’s CEO said in the latest financial update.
“A continued strong CPP market has drawn swing tonnage away from the chemical markets, supporting a further firming of spot rates,” Niels G. Stolt-Nielsen, CEO of Stolt-Nielsen Limited, explained, adding that the company continued to see rate increases in its contract renewals in late 2019.
Stolt Tankers saw an operating profit of USD 14.6 million in Q4 2019, down from USD 15 million in Q3 2019 and up from USD 7.7 million in Q4 2018. Revenues decreased to USD 274.8 million in the fourth quarter of 2019 from USD 291.8 million in the quarter earlier.
“Excluding the impact of the previously reported incident on Stolt Groenland and fewer operating days, Stolt Tankers’ fourth-quarter results improved as deep-sea utilisation increased and fuel costs decreased,” the company’s CEO commented.
“The fourth quarter was also the first quarter since 2016 in which we saw an increase in average contract rate renewals, while also achieving full recovery of cost increases related to the IMO 2020.”
Stolt-Nielsen Limited, which comprises three global bulk-liquid and chemicals logistics businesses, reported a net profit of USD 5.5 million in Q4 2019, compared to USD 3.2 million in the corresponding period a year earlier.
Revenues dropped to USD 497.5 million in Q4 2019 from USD 526.1 million in Q4 2018.
Stolthaven’s operating results decreased to USD 14.6 million in the fourth quarter from USD 19.5 million in Q3 2019, mainly due to the USD 5.5 million write-off of capitalised expenses at the Stolthaven Newcastle terminal and market softness, particularly in Asia-Pacific.
“At Stolthaven, despite the recent market softness and the effects of the US-China trade dispute, we expect improvements in operational performance to continue to strengthen results,” Stolt-Nielsen further said.
On the other hand, results at Stolt Tank Containers were up to USD 15.7 million, mainly due to reduced shipping costs and higher demurrage revenue.
“Stolt Tank Containers has seen an increase in bookings ahead of the Chinese New Year, which could eventually have a positive impact on utilisation,” the company’s CEO concluded.
Stolt-Nielsen portfolio consists of Stolt Tankers, Stolthaven Terminals and Stolt Tank Containers as well as Stolt Sea Farm and a number of LNG investments.