Stolt-Nielsen chief executive Udo Lange believes his company is in a beautiful place.
At his first earnings press conference — held at the SEB offices in Oslo — Lange was cautious about the chemical tanker market’s prospects moving forward but talked up the company’s flexibility in navigating a sector figuring out the Red Sea security situation.
“We’re in this beautiful spot,” Lange said, referring to Stolt-Nielsen’s 51% contract of affreightment coverage, with the remainder in the spot market.
It previously had 45% of its cargoes on COAs.
“We had a large customer come to us and say, ‘We’re looking to increase our COA with you.’ No problem. We can do this with you,” he said.
Overall, Lange described the rate environment as hitting a plateau at time charter equivalents of $30,144 per day, well above five-year highs.
He was unwilling to forecast higher, as he said customers were looking at the recent attacks on ships in the Red Sea by Houthi militants in Yemen and beginning to think strategically.
Some want to increase parcel size, others are staying out of the market for the time being and others are finding new trades after old ones seem less profitable.
“If you take all these things, you need a pretty big crystal ball because it’s really a customer by customer specific conversation,” Lange said.
For the fourth quarter, Stolt-Nielsen reported a $98.4m profit, up from $95.3m for the same period last year.
The performance came as revenues dipped to $695m from $732m over the same period, hit in part by lower volumes from its Stolt Tanker Containers business.
The earnings were touted as positive by both Fearnleys and Norne.
“Overall, a solid report and we expect to see positive estimate revisions,” said Fearnley Securities analyst Oystein Vaagen, who expected higher revisions for the company’s earnings moving forward, especially in the first quarter.
Norne’s Mindaugas Cekanvicius said Stolt-Nielsen reported “very solid figures exceeding our and consensus’ expectations”.
Stolt-Nielsen’s Oslo Stock Exchange-listed shares finished on Thursday up NOK 11 ($1.06) to NOK 405.
