Odfjell posted 1Q23 figures yesterday evening with the main metrics again in line with our estimates and again at the very solid levels. 2Q23 was guided to be in line or slightly above 1Q23, while the long-term prospects remain promising, thus we are likely to make minimal changes to our estimates.

Figures spot on our predictions

We had a kind of a cheat sheet with the peer’s Stolt-Nielsen’s results and knew that the firm chemical tanker market from 2022 continued into 1Q23, while swing tonnage remained in the oil market territory. All this led to spot-on solid results of USD 110m in EBITDA (USD 107m predicted by us), USD 68m in EBIT (USD 67m predicted by us) and the bottom line of USD 47m (USD 44m). The company also announced that the average COA rate renewal increased by 32% in 1Q23, covering 35% of estimated annual contract volumes, and currently the COA nominations stand at 50%.

2Q23 guided in line or slightly above 1Q, long-term promising expectations remain

Demand is anticipated to show stability in 2Q23 by the company. The spot market is likely to remain volatile at a healthy level and TCE results in 2Q23 were guided to be in line or slightly above 1Q23. The longer-term prospects are still promising with the expected slow demand growth, but growth, nonetheless. Chemical tanker orderbook remains at historical low levels, especially for sophisticated chemical vessels, while the percent of swing tonnage in chemicals market has dropped significantly at the beginning of 2023 with the expectations to recover rather later than sooner.

Following the in-line report and the guidance, we will make very minor adjustments to our estimates, while our Buy recommendation is likely to be reiterated.
Source: Norne Research