Stolt-Nielsen posted its 1Q25 (December-February) report this morning with in-line results and much more worries on the future, regarding the US port fees, conflict in the Red Sea and war in Ukraine. Weakening Tanker performance was somewhat offset by non-shipping business, this being the case for the company in the previous weak periods for chemical tankers. We are likely to make limited changes to our estimates after cutting those prior to the report and anticipate similar reaction from the street.

In-line results reported

Stolt Tankers' EBITDA fell by 17%, but, as has been the case for the company previously, was offset by the non-shipping business, improving 6%, demonstrating the benefits of diversified portfolio. This was just as expected by us and the figures did not surprise us the slightest. Average TCE revenues for 1Q were USD 27,620/d, a further decline from previous quarters, but still 39% above the historical average. Stable performance from Terminals and Tank Containers, while Sea Farm thrived in the Christmas period.

Outlook: uncertainty everywhere

Slight decline in the daily average TCE earnings is guided for 2Q25. However, the uncertainty is the key topic in the report with the ongoing conflict in the Red Sea mentioned together with the war in Ukraine and potential tariffs and port fees in the US. In the event of unfavourable outcome on the US port fee hearings, the company stated to have a range of mitigating tactics to offset the impact, including reducing port calls, prioritizing major ports, leaning into global trade shifts and passing costs through. While we were somewhat hoping that President Trump will come to his senses and the port fees would not be imposed, after yesterday's message on tariffs the hope is starting to fade.
Source: Norne Research