New chief executive Udo Lange might be adamant that Stolt Nielsen’s chemical tanker arm is best suited as a dividend driver, but Clarksons is not so sure.
Analyst Frode Morkedal said despite Lange’s decision to shelve a Stolt Tankers IPO “for the foreseeable future”, it could still happen at some point next year.
“The product/chemical tanker sector currently trades at an average [price to net asset value (NAV)] of 0.84, suggesting the market isn’t ripe for an IPO,” Morkedal said in a note published on Friday.
“However, the market sentiment can change fast, and an IPO in 2024 could still happen if we see the sector trading above NAV.”
During the company’s third-quarter earnings call on Thursday, Lange said Stolt Nielsen needed to see both a supportive tanker market and IPO market before going ahead with the long-awaited spin-off of its chemical tanker fleet.
For now, he sees Stolt Tankers as supporting the Stolt Nielsen dividend and expressed discomfort with the idea that investors regard Stolt Nielsen as a shipping company rather than a logistics company.
Morkedal maintained his buy rating on the company and his NOK 400 ($36.45) per share target, while arguing that a discount for Stolt Tankers is warranted until the spin-off happens.
In midday trading on Friday in Oslo, Stolt Nielsen shares were trading at NOK 330, up NOK 9 since the open and up NOK 14.50 from the previous close.
For the quarter, Stolt Nielsen reported a $90.1m profit, up from the $74.7m profit in the third quarter of 2022.
It brought in $694.4m in revenue, with $422.3m coming from Stolt Tankers.
The company reported lower volumes but higher rates for its contract of affreightment (COA) cargoes and a 15% rise in spot volumes, largely wiped out by a corresponding rate dip. For the quarter, 55% of cargoes were spot, while 45% were fixed via COAs.
