Odfjell’s chief executive Harald Fotland got a total compensation of $1.1m in 2023.
Fotland received a 100% bonus on his base salary of $521,000, doubling his total compensation.
Odfjell generated a net profit of $203m in 2023, which was the best financial year to date.
“Our 2023 financial performance is, to a large extent, market dependent,” Fotland said in a letter in the annual report.
“The positive market development that started in 2022 continued into 2023 despite geopolitical tensions, and in some cases because of them.”
Last year saw a significant strengthening of the company’s contract portfolio, according to the CEO.
“Our strategy to capture the short term and derisk the long term has proven efficient, and to this end, we have taken full advantage of the robust markets. Our solid contract coverage and portfolio will support earnings should the spot markets soften,” he said.
The limited vessel supply in the global chemical tanker market and Odfjell’s fleet composition and expected growth puts the company in a “firm position”, Fotland said.
“The promising outlook is encouraging and supports our collective efforts to deliver the highest quality of operations and services, and to keep advancing. Together, we will navigate safely while staying agile in an unpredictable global environment,” he concluded.
Finance chief Terje Iversen made $529,000 in 2023.
“The goal of Odfjell’s financial strategy is to have a capital structure and business plan that is both resilient to market cycles, yet adaptable enough to seize opportunities and trends,” Iversen said.
“We need to be able to withstand prolonged adverse conditions in the chemical and financial markets, while also being able to act on opportunities and challenges, at any given time,” he said.
The cash break-even point for 2023 was around $23,500 each trading day.
“Higher benchmark interest rates, cost inflation, and fleet reductions have outweighed the break-even gains from better financing conditions and reduced debt in recent years, but we are optimistic that the trend will reverse and the break-even level will improve in the short to medium term,” Iversen said.
All new loans made in 2023 were made using the firm’s Sustainability-Linked Finance Framework.
At the end of the year, these loans made up 65% of total interest-bearing debt.
In January 2024, Odfjell developed a new Transition Financing Framework to help fund both large and small decarbonisation projects.
“Although we have limited debt maturities in 2024, we will continue to streamline our debt portfolio, further reducing debt and our cost of capital,” Iversen added.
