Stolt-Nielsen’s chemical tanker earnings are booming as market fundamentals and geopolitical turmoil align in its favour.
The “effective closure” of both the Panama and Suez canals has added further tonne-miles to the sector, chief executive Udo Lange noted in the fourth-quarter results statement.
“From a logistics perspective, this creates several challenges. However, by working closely with our customers, we aim to minimise any negative impact on their supply chains,” Lange added.
Lange said 2023 had been “very challenging”.
But he added: “The fourth quarter produced another strong set of results, culminating in another strong year for our company.”
Stolt Tankers experienced “particularly robust market conditions,” Lange said.
“Following a fall in spot rates during the third quarter, the firming trend resumed as we headed into the contract renewal season,” he added.
The chemical carrier subsidiary reported fourth-quarter operating profit of $99.8m, up from $78.2m the year before.
Sailed-in rates were $30,144 per day, up 11%.
Tanker revenue was $441.3m, up from $412.4m the year before.
Deep-sea freight revenue increased by $12.4m, driven by a 34.5% increase in contract rates in a better market for renewals.
Bunker costs were also lower at $733 per tonne, against $615 per tonne previously.
Overall earnings rise
Group net profit rose to $98.4m from $95.3m a year ago,
Revenue was down at $695.2m against $732.5m in 2022.
But the bottom line was boosted by a reduction in the provision made in the case of the fire on the MSC Flaminia in 2012.
Stolt Tank Containers had 29 tank containers on the vessel, three of which were stowed in cargo hold number four, where the fire began.
The subsidiary was found 45% liable for the accident
Full-year earnings came in at $296.7m, compared with $280.9m in 2022.
Six stainless steel carriers were ordered at Wuhu Shipyard in China in the fourth quarter, with delivery from 2026 onwards.
This was the company’s first new order since five ships were handed over in 2018.
“Yard capacity remains very tight, and we are pleased that we secured these newbuildings with a favourable delivery window that means they will be delivered in time for the retirement of older tonnage,” Lange said.
Stolt-Nielsen has also benefited from a firm product tanker market, which is keeping swing tonnage out of the chemicals sector.
“The low orderbook provides a good foundation for the favourable chemical tanker markets to continue for the foreseeable future,” the company said.
“We are confident that the firm rate environment will be maintained as we renew existing, and acquire new, contracts,” it added.
Equity income from joint ventures was down by $2.8m, predominantly reflecting the weaker market situation in Asia, despite additional trading days from the Stolt NYK Asia Pacific Services (SNAPS) pool, which added two ships from Eneos Ocean in the fourth quarter.
Norne Securities called the results “exceptional”.
