Stolt-Nielsen posted its 2Q (March-May) report this morning and it would have been record quarterly results reported if not the provision for the MSC Flaminia incident back from 2012. Higher contract rates and improved spot volume were the reasons for stronger Stolt Tankers results, however, with the spot rates under pressure, the next two quarters were guided to have a small drop in the sailed-in revenues, nevertheless, the long-term view from the company remains positive.

Hundred million bottom line would have been breached

Stolt-Nielsen reported a record quarterly result before the loss provision. The adjusted-for-provision net profit was calculated to be USD 113.3m but the loss provision of USD 155m related to the MSC Flaminia incident mixed and mashed the P&L statement. The average rate increase on contracts of affreightment renewed by Stolt Tankers in the second quarter was almost 56% on average but on a relatively modest volume and the segment alone brought USD 97m operating profit to the table. Stolthaven Terminals added USD 28m, while the Tank Containers, although guided previously to reduce more significantly, held at a solid USD 40m operating profit level.

Guidance for a weaker 2H

Due to the overall macroeconomic environment and related volatility in global tanker markets, the spot rates are under pressure and the company expects to see a small drop in the sailed- in revenues during the 2H23. The long-term view remains positive on the back of a continued favourable supply outlook for the chemical tanker markets. Flat earnings for Terminals were guided for the remaining part of 2023, while the previously anticipated margin reduction in the tank container market was seen starting to materialize, therefore reduced earnings from the segment should be expected in 2H23. Stolt Sea Farm is experiencing a pick-up in demand in the hospitality sector with a start of a tourism season in southern Europe and will be focusing on expanding the sales channels and geographical reach.
Source: Norne Research