Norway’s Stolt-Nielsen is not aggressively seeking more contract cover for the group’s chemical tankers in healthy spot markets.
The Stolt Tankers fleet has 55% of days assigned to contracts of affreightment (COAs) currently.
“I’m very proud of what the team has been able to achieve in both the rates that they have secured under that portfolio, and the terms and conditions,” chief executive Niels Stolt-Nielsen told a conference call.
He added he feels “quite comfortable” about the 55% level.
“We will always be able to fill up our ships, it’s just a matter of at what price we will be able to capture,” the CEO said.
Despite a levelling off of rates in recent weeks, the fundamentals of the market remain the same, he explained.
“There are no new additional ships coming into this segment for the next two years,” Stolt-Nielsen added.
The company has “a very light” contract renewal schedule in the third quarter.
“So I don’t see any reason for us to start chasing any additional contracts at this time. We have a nice contract portfolio as it stands,” the CEO said.
In the third and fourth quarters combined, between 25% and 30% of COAs will be renewed.
Historically, Stolt Tankers’ coverage has been around 60% to 70% of ship days.
Resilient sector
“I think that we have historically seen that the chemical market is quite resilient. There can be a dip, but … it’s pretty darn steady at 2%, 3% growth,” Stolt-Nielsen told the call.
“The fundamentals are in our favour. So as long as we don’t have a total … meltdown of the global economy, which I don’t think is going to happen, I think that we will position for 2023 and I do expect that we will continue to see strong earnings and we should be able when the contract renewal season comes due to continue to renew at healthy levels,” he added.
Stolt Tankers posted adjusted Ebitda of $150m for the second quarter ending 31 May, above the Fearnley Securities estimate of $137m.
The increase was driven by higher contract rates and improved spot volumes, taking its sailed-in revenue just north of $30,000 per day for the first time at $30,880.
This was up 6.2% quarter on quarter.
