Norwegian chemical tanker owner Stolt-Nielsen continues to plot a fleet renewal, but is not concerned about its older vessels.
Speaking on a conference call with analysts, chief executive Niels Stolt-Nielsen said newbuildings are the biggest and toughest decision a shipowner has to make.
The group has added five 2016-built vessels from Peter Georgiopoulos’ Chemical Transportation Group this year.
"We are very well positioned as we are. I am not worried about the age profile of our fleet," the chief executive said.
"I think that actually could be advantageous at this stage. We are well positioned for a market recovery."
He said, however, that the company will "always have a newbuilding programme".
"The time that we are spending now is to consider the various propulsion systems that we will use when we order," he added. "If it’s now or in the future, that’s really where we are focusing."
Stolt-Nielsen said the realistic decarbonisation alternatives right now are more efficient use of conventional engines and LNG as a fuel.
The company is involved in projects studying methanol, ammonia and hydrogen as well.
"But it’s not there yet," he added.
Three-quarters of the fleet to be replaced
The company has said 75% of its ships will have to be replaced by 2035, which will push it to the forefront of future fuels and carbon-neutral vessel innovation.
The group has 87 tankers, many of which date from the 1990s and 2000s.
Its net profit in the fiscal quarter ending 28 February was $2.5m, compared with a loss of $20.2m a year earlier.
And Stolt-Nielsen said that, after a challenging start to the year, he still believes the Covid-19 vaccine roll-out will spur markets.
UK leading the way
"I wish everybody could be as good as the UK," he added.
"I think it’s just a matter of time before we will see a strong improvement in our segment. I am quite bullish, if you look at the stimulus ... that has occurred during the lockdown."
The company is now focusing on contracts of affreightment, but is limiting their duration in markets expected to improve in the second half of 2021.
The group had available liquidity at the end of the quarter of $431m, and paid off an outstanding bond using $154m of this.
Chief financial officer Jens Gruner-Hegge said this left the owner with three bonds, with the next maturity in September 2022.
He said the company has now completed all the conditions for its new $100m revolving credit line.
IPOs still in the pipeline
The shipowner is still working on initial public offerings for fish business Stolt Sea Farm and Stolt Tankers.
Stolt-Nielsen said the process of talking to "potential cornerstone" investors has begun for Stolt Sea Farm.
"We have had positive feedback. But it’s important for us that we find the right investors. We don’t want to have people that ... are short-term. This is a long-term project," he added.
He ruled out a sale of the subsidiary: "If there is one business that we are involved in that has a huge growth potential, it is Stolt Sea Farm."
