Chemical tanker and terminals company Odfjell has revealed a twin-pronged approach to expanding its fleet.
The Oslo-listed shipowner is launching a new coated vessel pool, Odfjell MR, with six MR carriers from Navig8 Chemical Tankers and six of its own units.
All the ships will join Odfjell's fleet during the coming quarters, the Norwegian company added.
"We are actively working on a further expansion of the pool," it said.
Capital-efficient
"This consolidates the chemical tanker market further, yields economies of scale for Odfjell and will generate a steady and positive cash flow to Odfjell with little downside risk."
Chief executive Kristian Morch said the move would strengthen the operational platform in a capital-efficient way.
Earlier this year, the company expanded its Chem25 pool with four 25,000-dwt vessels from Navig8, bringing the number of ships operated to 19. But in August, Stolt-Nielsen bought five of these ships from Peter Georgiopoulos’ Chemical Transportation Group and moved them into its own pool.
Danske Bank analyst Anders Karlsen said: "Following the loss of pool vessels recently, a newly established Odfjell pool has attracted members.
"This is expected to be positive for Odfjell going forward as it generates fee revenue. It is also serving as a form of consolidation."
Attractive rates
Odfjell also said on Thursday it has signed three long-term time charters for new medium-sized stainless steel carriers being built at Imabari's Asakawa shipyard.
These will deliver in 2022 at "attractive" rates, the company said.
This appears to be a new order of 25,700-dwt ships. The owner has not been revealed, but it fits Odfjell's strategy of chartering in Japanese newbuildings.
Asakawa is listed as building four 19,900-dwt chemical tankers for Formosa Plastics, due in 2021, and a 15,900-dwt ship for an unknown owner also delivering in 2021.
Odfjell has completed its newbuilding programme with the delivery of its fifth "super-segregator" tanker from Hudong-Zhonghua Shipbuilding in China. These ships are the world's biggest stainless steel chemical tankers.
Profit rising
Odfjell said its net profit in the third quarter was $3.9m, up from a loss of $1.1m in the same period of 2019.
Revenue grew to $248m, versus $233m last year, with Ebitda up at $72m from $51m.
Ebitda from the tanker fleet hit $64m, up from $45m.
Danske Bank said Ebitda was the second-best since 2016 and beat consensus by 1%.
"Demand in the chemical tanker space has held up well during Covid-19, but a return of automotive and construction material demand is required to get back to normal," Karlsen added.
Contract of affreightment (COA) renewals were up 4.5%, with COA coverage "normalising" at 50% of the fleet, up from 35% in the second three months.
Morch said the third quarter was affected by seasonality and a high number of dry-dockings.
"We are satisfied with our ability to continue to report positive results in this challenging environment. We keep renewing contract rates at higher rates, which is an encouraging sign."
The company expects the fourth-quarter result to be in line with the third.
The seasonal slowdown affected spot rates through the summer.
Reduced competition
"The trend of reduced competition from swing tonnage paused during the third quarter, and while we expect a short-term pick up in swing tonnage carrying chemicals and vegoils, we do not expect competition to become as severe as the last couple of years," the company said.
This is supported by improving fundamentals within the clean product and crude tanker segment for the years to come, it added.
