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Stolt-Nielsen: Repeating strong results is always welcome

Stolt-Nielsen posted its 3Q (June-August) report this morning. Prior to the results we communicated that repeating the last quarter’s figures would be a good achievement and now we can conclude that EBITDA and EBIT were in line with 2Q numbers and spot on our expectations, thus it was another very strong quarter from the company. With the chemical tanker rates strengthening and the momentum anticipated to continue further, we will make limited changes to our estimates and our positive stance towards the stock is likely to be reiterated.

Main metrics spot on our expectations

Stolt-Nielsen posted yet another strong quarterly report this morning with the figures, although being in line, but slightly beating last month’s record-high results. We were anticipating just that, and both the EBITDA of USD 186m and EBIT of USD 114m came spot on our projections of USD 182m and USD 110m respectively. The tankers again were the star of the report, while Terminals were steady (adjusted for one-offs), Containers reported just a tad lower EBIT, but Sea Farm did not disappoint reflecting the higher average sales price for both turbot and sole.

Spot rates +40% in 3Q

As communicated by the company, in April the momentum for the chemical tankers started to build up and became even more evident during the third quarter when spot rates increased by almost 40% from the second quarter average. What is even more important is that this momentum is anticipated to continue with further improvements in the subsequent quarters with a positive impact from improved contract renewals. The company mentioned and, in our view, should focus on the cost side going forward, nevertheless, after the in-line report we will make only minor adjustments to our model and Buy recommendation is likely to be reiterated.

Full Report

Source: Norne Research

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