Odfjell delivers profit record that it expects to break in the second quarter

Odfjell reported what it described as a record profit for the first quarter, as the chemical tanker market tightened on the back of growing tonne-mile demand.

The Oslo-listed shipowner and operator’s chief executive, Harald Fotland, said it expects to repeat the feat in its next quarterly earnings statement.

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The chemical tanker player reported a net result of $67.8m, up from $46.7m in the same period of 2023.

Time-charter revenue jumped to $195m from $181m a year earlier, while operating expenses fell from $71.1m to $72.4m.

“This reflects the tightened market situation due to the increased tonne-mile demand. We also continued to increase the rates in our COA portfolio,” Fotland said, referring to contract-of-affreightment renewals at 14% higher rates.

“This, in combination with a very professional and dedicated organisation, gives a solid basis for future earnings.”

Fotland said he expects earnings to increase in the second quarter.

Odfjell said the first quarter saw shifts in trading patterns as a result of the Houthi menace on shipping, leading the company to reroute its ships beginning in December.

“The majority of chemical tanker operators followed suit during January, significantly prolonging voyages between Middle East and Asian markets and the Atlantic basin,” the company said.

“An already tight chemical tanker market firmed further, contributing to improving freight rates in the quarter.

The company’s terminals business also had a strong quarter, with $10.9m in Ebitda representing its highest performance since Odfjell restructured the portfolio in 2018 and 2019.

Odfjell finished the first quarter with a cash balance of $87m and bank facilities with $87m in undrawn funds.