Oslo-listed chemical tanker and terminals group Stolt-Nielsen has logged a huge first quarter profit as rates for contract renewals soared 50%.

The Norwegian owner of Stolt Tankers said earnings in the three months to 28 February were $99.8m, from revenue of $708.7m.

This compares to earnings of $52.3m from revenue of $606.2m a year ago. Ebitda came in at $215.6m.

Stolt Tankers produced an operating profit of $87.1m, up from $25m, due to the higher rates and improved spot volumes.

The average sailed-in earnings per ship were $29,066 per operating day, up from $27,162 in the preceding three months.

Chief executive Niels Stolt-Nielsen said the period continued where 2022 ended, with a solid performance from all businesses during what is typically the seasonally weakest quarter of the year.

He added that the impact of contract renewals was beginning to be seen.

The 50% rise is a “significant improvement” over the fourth quarter’s 30% rate jump, the CEO said.

“In pushing hard for improved terms, a number of contracts were not renewed, but we continue to see most of those contract volumes resurface in the spot market, where we have been able to fix at higher rates. Negotiations continue,” Stolt-Nielsen added.

Market to remain firm

He sees a continued favourable supply/demand balance in chemical tanker markets during the coming years.

Stolt Tankers’ revenue hit $415.5m, with deep-sea revenue increasing $13.4m.

Volumes were down 1.2% as contract of affreightment (COA) business fell due to the strict stance on renewal pricing.

Bunker prices continued to fall, knocking $1.1m off the group's bottom line.

Depreciation fell by $2m, reflecting an increase in residual values due to rising steel prices.

There was no mention in the results statement of the planned initial public offering for Stolt Tankers, which the CEO has indicated will take place this year.