Stolt-Nielsen Limited Reports Highest Second Quarter Profit Since 2007
Stolt-Nielsen Limited yesterday reported unaudited results for the second quarter and first half of 2022. The Company reported a second-quarter net profit attributable to shareholders of $58.6 million, with revenue of $689.1 million, compared with a net profit of $52.3 million, with revenue of $606.2 million, in the first quarter. The net profit attributable to shareholders for the first half of 2022 was $110.9 million, with revenue of $1,295.3 million, compared with a net profit attributable to shareholders of $10.3 million, with revenue of $1,007.1 million, in the first half of 2021.
Highlights for the second quarter, compared with the first quarter of 2022, were:
• Stolt Tankers reported operating profit of $40.8 million, up from $25.0 million driven by improved volumes, higher utilisation and increasing spot rates, partly offset by higher net bunker costs.
• The Stolt Tankers Joint Service (STJS) Sailed-in Time-Charter Index increased from 0.52 to 0.56. The STJS sailed-in revenue for the quarter was $20,772 per operating day based on an average ship size of 31,550 deadweight tonnes (DWT), up from $18,786.
• Stolthaven Terminals reported operating profit of $25.7 million, up from $22.0 million. The improvement in results was driven by higher throughput and storage revenue following an increase in utilisation as well as a gain on the sale of a terminal in Australia.
• Stolt Tank Containers (STC) reported operating profit of $44.7 million, up from $40.0 million, reflecting increased shipments and higher demurrage revenue.
• Stolt Sea Farm reported an operating profit, before fair value adjustment of biomass, of $4.7 million compared with $6.5 million, reflecting lower turbot volumes sold following the seasonally strong first quarter, while sales prices for both turbot and sole remained firm.
• Stolt-Nielsen Gas reported an operating loss of $1.8 million, compared to an operating profit of $3.6 million. The previous quarter included a $4.7 million gain from our share of the sale of a 20,000-cbm newbuilding by Avenir LNG.
• Corporate and Other reported an operating loss of $5.9 million compared with a loss of $4.7 million. The increased loss was due to higher profit sharing and other employee benefit expenses.
Niels G. Stolt-Nielsen, Chief Executive Officer of Stolt-Nielsen Limited, commented: “The second quarter net profit is the Company’s highest since 2007, which is encouraging considering we recognised an $11.1 million write-off of debt issuance costs and hedge losses related to the refinancing of the revolving credit line, our main liquidity tool. The second quarter continued where the first quarter ended with growing demand and a shrinking orderbook for new ships, with the positive momentum continuing to build in the chemical tanker market. Our tanker trading team is standing firm on contract renewals and spot fixtures to capitalise on the tightening market, and we are moving in the right direction. However, considering the historically low freight levels and weak returns that the chemical tanker industry has seen for many years now, we still have a long way to go until our returns through the cycle are sufficient to attract long-term capital for further investments in newbuildings. At Stolt Tank Containers the team has been highly successful in securing space on ships in a very tight market, ensuring our customers’ products can reach their customers, and in the process have been able to produce another quarter with record results. At Stolthaven Terminals the increase in utilisation has allowed us to drive up margins in a tightening storage market. And at Stolt Sea Farm, maintaining prices in a challenging market has delivered a continuation of the good underlying operating results.
“I expect our positive momentum to carry through the rest of the year. Stolt Tankers should continue to see rising freight rates that will outpace the rise in fuel costs. STC may see demand fall off slightly due to high transportation costs driven by supply chain bottlenecks, but should still enjoy good margins throughout this year. At Stolthaven Terminals, high utilisation will have a positive impact on margins for the rest of the year. And at Stolt Sea Farm the summer months are typically accompanied by higher demand for quality seafood.
“Although we are starting to enjoy improving returns on our investments, we cannot ignore the many external challenges that lie ahead. The war in Ukraine is increasingly impacting energy supplies, particularly in Europe. Excess liquidity in the private sector following many years of quantitative easing, together with post-pandemic demand, has driven up inflation, which is now being amplified by rapidly rising oil and gas prices. To curb inflation central banks are raising interest rates, which, if taken too far, will inevitably lead to a global recession. We are monitoring the potential impact these factors could have on our businesses. We remain cautious when making new investments, ensuring that the return hurdles account for higher inflation and funding costs in the future, and we are maintaining our focus on debt reduction to strengthen the balance sheet and continue to favour fixed rate loans to protect our cash flow against rising interest rates.”
This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act
Source: Stolt-Nielsen M.S. Limited