Stolt-Nielsen surprised us on the positive side with its fiscal 4Q (September-November) figures as Tank Containers revenues came in ~13% higher than expected. The strong performance reported in the previous quarter at Stolt Sea Farm also continued. Other segments performed relatively in-line with our expectations. The overall market outlook remains positive as well.

Continued strong performance of Tank Containers and Sea Farm

Stolt-Nielsen reported stronger-than-expected figures this morning. The surprise is primarily explained by ~13% higher revenues in Tank Containers segment, driven by an increase in transportation revenue per shipment, reflecting the steep rise in freight cost. Yet, Stolt Tankers segment has recorded lower volumes and higher voyage expenses, reducing the trading margins. Also, the company has reported a USD 10m impairment in Australian terminals, while the other terminal locations continued to perform well. The Stolt Sea Farm segment continued to see high volume and improved sales prices for both turbot and sole.

Overall, the company’s revenues including JV came in at USD 602m vs. our expected USD 585m, while adj. EBIT beat our and the market’s expectations and was at USD 93m (USD 62m our, USD 54m consensus projections).

Positive outlook for all segments

Despite the first quarter’s tendency to be seasonally weakest, the company indicated that the initial signs are that volumes and rates in all three logistics businesses are holding or even improving. Tankers’ markets should strengthen, supported by increasing volumes and a slower delivery rate of new-buildings. As for terminals’ segment, higher rates are expected due to increasing utilization. Also, Both Stolt Tank Containers and Sea Farms were guided to continue their strong performance in the coming quarters.
Source: Norne Research