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Stolt-Nielsen posts second-quarter net profit of $113.3 million

Stolt-Nielsen Limited reported unaudited results for the second quarter ending May 31, 2023.

The Company reported a second-quarter net profit of $113.3 million before an incremental loss provision of $155.0 million related to the MSC Flaminia, and $8.3 million after the provision adjusted for tax and profit sharing, with revenue of $721.9 million, compared with a net profit of $99.8 million, with revenue of $708.7 million, in the first quarter. The net profit for the first six months of 2023 before the loss provision was $213.1 million, and $108.1 million after the provision adjusted for tax and profit sharing, with revenue of $1,430.6 million, compared with a net profit of $110.9 million, with revenue of $1,295.3 million, in the first six months of 2022.

Highlights for the second-quarter 2023, compared with the first quarter, were:

  • Stolt-Nielsen reported a record quarterly result before the loss provision.
  • Stolt-Nielsen Limited (SNL) consolidated EBITDA1 of $82.5 million, down from $215.6 million. Before the loss provision the EBITDA was $227.5 million.
  • Stolt Tankers reported operating profit of $96.8 million, up from $87.1 million, largely driven by higher contract rates and improved spot volume.
  • The STJS average sailed-in revenue for the quarter was $30,880 per operating day, up 6.2% from $29,066.
  • Stolthaven Terminals reported operating profit of $27.8 million, up from $25.1 million as throughput revenue at owned terminals increased by 18.9%.
  • Stolt Tank Containers reported operating profit of $39.7 million, marginally up from $39.3 million. Lower transportation and demurrage revenue was partly offset by lower ocean freight cost and an increase in shipments.
  • Stolt Sea Farm reported an operating profit before fair value adjustment of biomass of $4.4 million, down from $5.6 million, reflecting higher production costs as electricity and feed costs increased together with administrative and general expenses.
  • Stolt-Nielsen Gas reported an operating loss of $2.7 million, compared to a loss of $3.4 million.
  • Corporate and Other reported an operating profit of $2.0 million compared to a $9.2 million loss in the prior quarter.

Niels G. Stolt-Nielsen, Chief Executive Officer of Stolt-Nielsen Limited, commented: “The second quarter produced record performance for the group, with a solid performance from our four main divisions. Stolt Tankers generated record results, benefitting from higher contract freight rates as renewals concluded in prior quarters took effect. Results at Stolthaven Terminals improved on the back of continued high utilisation and an improvement in throughput volumes. At Stolt Tank Containers, the number of shipments increased, but at lower margins due to increased competition. For Stolt Sea Farm, the second quarter saw a good increase in sales volume following a slow January and February and a further strengthening in the price of sole, however inflationary pressures negatively impacted production costs.

“The average rate increase on contracts of affreightment (COA) renewed by Stolt Tankers in the second quarter was almost 56% on average but on a relatively modest volume. However, due to the overall macroeconomic environment and related volatility in the broader tanker markets, we are currently seeing spot rates under pressure and expect to see a small drop in our sailed-in revenue during the third and fourth quarters. Our long-term view remains positive on the back of a continued favourable supply outlook for the chemical tanker markets.

“At Stolthaven Terminals, a slowdown in the demand for chemicals driven in part by the uncertain economic environment could ease some of the recent tightness seen in the global storage market. However, having recently secured higher storage rates on contract renewals we expect relatively flat earnings in the second half of the year.

“The anticipated margin reduction in the tank container market has started to materialise. My expectation is for a reduction in STC’s earnings beginning in the third quarter and continuing through the remainder of the year.

“With the advent of summer, Stolt Sea Farm is experiencing a pick-up in demand in the hospitality sector, buoyed by a seemingly strong start to the tourist season in southern Europe. With strong production growth at our turbot and sole farms we continue our focus on expanding our sales channels and geographical reach to support sales growth and price improvements.”

“Although the adverse ruling in the MSC Flaminia court case was a tremendous disappointment, it is testament to the strength of the organisation that the Company, even after taking a loss provision of $155 million, maintains the liquidity and balance sheet strength to support its operations and pursue its strategy uninterrupted.”

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