Stolt-Nielsen Limited Reports Unaudited Results For the Second Quarter and First Half of 2019
LONDON, July 3, 2019 – Stolt-Nielsen Limited (Oslo Børs: SNI) today reported unaudited results for the second quarter ended May 31, 2019. Net profit attributable to shareholders in the second quarter was $3.6 million, with revenue of $518.9 million, compared with a net profit of $7.9 million, with revenue of $501.9 million, in the first quarter of 2019. Net profit attributable to shareholders for the first six months was $11.5 million, with revenue of $1,020.9 million, compared with $48.3 million1, with revenue of $1,056.3 million in the first half of 2018.
Highlights for the second quarter of 2019, compared with the first quarter of 2019, were:
- Stolt Tankers reported an operating profit of $12.8 million, down from $14.3 million, mainly reflecting an estimated negative impact of $5.0 million from the ITC terminal fire in Houston in mid-March.
- The Stolt Tankers Joint Service Sailed-in Time-Charter Index held steady at 0.53 for the third consecutive quarter.
- Stolthaven Terminals reported an operating profit of $19.7 million, up from $18.0 million, due in part to a $0.7 million gain on the sale of the rail transportation business.
- Stolt Tank Containers reported an operating profit of $12.6 million, down from $15.7 million, as shipment-related operating expenses increased and margins narrowed.
- Stolt Sea Farm’s operating profit before the fair-value adjustment of inventories was $2.0 million, up from $1.0 million in the seasonally strong first quarter that included a $1.7 million one-time write-off of inventory.
- Corporate and Other reported an operating loss of $2.1 million, compared with a loss of $3.6 million in the previous quarter, reflecting lower profit-sharing accruals.
- Subsequent to the end of the second quarter, the Company obtained refinancing commitments totalling $620.0 million.
Commenting on the Company’s results, Niels G. Stolt-Nielsen, Chief Executive Officer of Stolt-Nielsen Limited, said: “Stolt-Nielsen Limited’s second-quarter results were essentially unchanged from the first quarter as the chemical tanker market appears to have bottomed out. Results at Stolt Tankers were held down by an estimated $5.0 million negative impact resulting from the fire at the ITC terminal. Stolthaven continued to perform in line with expectations, driven by terminal expansions and ongoing operational and commercial improvements. In contrast, results at Stolt Tank Containers were below expectations, as the positive impact of a double-digit increase in shipments was offset by rising shipment-related costs. Stolt Sea Farm’s results were down from the seasonally strong first quarter, excluding a first-quarter inventory write-off.”
“As far as the outlook is concerned, evidence of a definitive upturn in the chemical tanker market has yet to materialize, but deliveries of new tonnage into the market are slowing. With no further ships being ordered, the market is expected to turn. At Stolthaven, we expect continued gradual improvements in performance, as a result of a strong U.S. market, combined with terminal expansions and enhanced operational efficiencies. At STC, while ocean and inland freight costs are rising, we expect to be able to pass these costs along in subsequent quarters. The second half of 2019 will be telling, as we continue to monitor the potential impact of trade disputes on both STC and Stolt Tankers. At SSF, we continue to expand into new markets for our sole and turbot, and expect our new sole farms now under construction in Tocha, Portugal and Cervo, Spain to support additional growth once these facilities fully ramp up production towards the end of 2020.
“The implementation of the IMO 2020 regulations aimed at reducing sulphur oxide emissions is now less than six months away. As we have said repeatedly, it is economically unfeasible for the shipping industry to absorb these costs. While these regulations mainly impact Stolt Tankers, they also have implications for Stolt Tank Containers. We continue to maintain that customers and, ultimately, consumers must bear the costs imposed by these new regulations aimed at protecting the environment.”
“Subsequent to the end of the second quarter, the Company obtained refinancing commitments, subject to documentation, for Stolt Tankers totalling $420.0 million in debt secured by 21 chemical tankers. In addition, the Company has obtained commitments on a new $200.0 million US private placement secured by the New Orleans terminal. With these two facilities, SNL will have sufficient funds to repay the Nordic bond debt coming due in September 2019 and April 2020, while maintaining a minimum of $200.0 million in available liquidity throughout that period.”
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.