Norwegian shipowner Odfjell has seen another record quarter as tight market conditions pushed tanker rates to elevated levels.
Net profit for the second quarter was $88.2m versus the $52.6m achieved in the corresponding period in 2023, the Oslo-listed company said.
Odfjell Tankers achieved time-charter earnings for the second quarter of $215m compared with the $185m achieved in the same quarter of last year.
“In the second quarter of 2024, Odfjell delivered yet another record result, following the strong first quarter,” chief executive Harald Fotland said.
“The market balance continued to be tight with our robust COA [contract of affreightment] portfolio and excellent operational performance underpinning our solid financial results.”
The Bergen-based shipowner’s fleet saw earnings average $36,493 per day up from the $30,842 per day seen a year ago.
“The second quarter saw continued healthy volumes with increased nominations under our contracts. This meant that contract cargo increased its share of total volume to 62% in the quarter,” Odfjell said.
“Export volumes carried on Odfjell vessels were strong from the Middle East region and stable from Asia, whereas volumes from the US Gulf declined.”
About 15% of the volumes carried on Odfjell vessels in the second quarter originated from the Middle East region.
Looking ahead, Odfjell said macroeconomic indicators keep pointing in different directions, and while growth is expected to continue in all regions, the lack of acceleration, particularly in China, is “causing some concern in the markets”.
Odfjell said the conflict in the Middle East appears to have worsened, with an “increased risk of a wider conflict in the region after recent events”.
“The Houthi rebels continue to attack commercial vessels in the Bay of Aden and Southern Red Sea, and the rerouting of vessels away from the Red Sea looks to continue,” it said.
On the newbuilding front, Odfjell said the total orderbook was still at “modest levels” despite some new orders for chemical tankers during the quarter.
Odfjell’s share of the current total newbuilding orderbook in its core deep-sea segment continues to be about 20%.
The company said that while the chemical tanker market remains strong, it has seen spot rates trend down since the end of the second quarter in line with seasonal patterns.
It said it has also seen a slight decrease in tonne-mile demand as capacity has increased in the Panama Canal as increased rainfall has led transits to approach close to normal levels.
“After a summer slowdown, the spot market is expected to pick up towards the end of the third quarter, likely supported by large tankers switching back to dirty products,” it said.
But Fotland added that while he expected the third quarter to be “another strong quarter”, it will be “somewhat below” that of the second quarter.
