Norwegian chemical tanker owner Odfjell has fallen into the red in the fourth quarter, but says chemical tanker markets are improving.
The net deficit to 31 December was $47.6m, versus a profit of $104.3m in 2017.
Kristian Morch, chief executive of Odfjell, said the quarter "concluded a challenging year for chemical tankers, but the market improved towards the end of the quarter.
"This is consistent with our view that the market has healthy fundamentals," he said.
"We do expect continued volatility, but we believe our markets have passed the bottom, and we therefore expect improved performance in the first quarter."
Analysts at DNB Markets called the results disappointing, with an adjusted loss of $25m more than double the $10m red number projected.
Operating numbers also missed forecasts, with adjusted Ebitda of $22m more than a quarter shy of consensus, DNB Markets says.
Chemical tanker spot rates improved towards the end of the year, and this seems set to continue in the first quarter, Odfjell said.
Norne Research said the result was "somewhat below our and street’s expectations, but the outlook remains positive."
"We will not make any major changes to our estimates following the report and our positive stance towards the share is likely to be reiterated," it added.
New terminals partner
It booked an impairment on its terminals in 2018, but said that following the sale by partner Lindsay Goldberg (LG) of its holding in the Rotterdam and Antwerp business, LG has now entered into an agreement to sell its 49% shareholding in Odfjell Terminals US to Northleaf Capital Partners.
"We look forward to welcoming Northleaf as our new partners in the US and developing our US business together with them," Odfjell said.
The tanker result improved slightly in the quarter. Bunker costs remained high, although they fell towards the end of the year.
Off-hire was cut and there was a positive development in some of the niche trades.
Future is brighter
Looking ahead, Odfjell said palm oil, an important absorber of chemical tanker supply, saw record production and exports levels between September and October from Malaysia and Indonesia.
This has led to high inventories which further led Indonesia to levy its export tax and India later reducing its import tax for the product, it added.
This is expected to support demand for chemical tankers in 2019.
The clean tanker market has improved in recent months and has led to reduced competition for commodities normally carried by chemical tanker tonnage, Odfjell said.
"We forecast chemical tanker supply growth of 2% and chemical tanker demand of 5% on average per year through 2021," it added.
The company said the remaining gas carriers will be sold in the first half.
