Stolt-Nielsen Limited (Oslo Børs: SNI) today reported unaudited results for the first quarter of 2022. The Company reported a first-quarter net profit attributable to shareholders of $52.3 million, with revenue of $606.2 million, compared with a net profit of $35.0 million, with revenue of $593.1 million, in the fourth-quarter 2021.
Highlights for the first quarter, compared with the fourth quarter of 2021, were:
- Stolt Tankers reported operating profit of $25.0 million, up from $19.2 million as rising bunker prices were more than offset by bunker surcharges and higher spot freight rates.
- The Stolt Tankers Joint Service (STJS) Sailed-in Time-Charter Index increased marginally from 0.51 to 0.52. The STJS sailed-in revenue for the quarter was $18,786 per operating day based on an average ship size of 31,717 deadweight tonnes (DWT), marginally up from $18,438.
- Stolthaven Terminals reported operating profit of $22.0 million, up from $8.4 million. Besides a prior quarter negative impact of a $10.0 million impairment, the improvement in results was largely driven by higher throughput and storage revenue following an increase in utilisation.
- Stolt Tank Containers reported operating profit of $40.0 million, up from $36.4 million, reflecting improved transportation margin and higher demurrage revenue.
- Stolt Sea Farm reported an operating profit, before fair value adjustment of biomass, of $6.5 million compared with $5.3 million, reflecting continued high volumes and firm sales prices for both turbot and sole.
- Stolt-Nielsen Gas reported operating profit of $3.6 million, compared to $1.8 million. The previous quarter included a gain on sale of land in Canada of $3.2 million, while the first quarter included $4.7 million as our share of a gain on the sale of a 20,000-cbm newbuilding by Avenir.
- Corporate and Other reported an operating loss of $4.7 million compared with a loss of $0.1 million. The increase was due to higher profit sharing and other employee benefit expenses.
Niels G. Stolt-Nielsen, Chief Executive Officer of Stolt-Nielsen Limited, commented: “Typically the first quarter of the year is the seasonally weakest quarter for our businesses. However, this year the first quarter showed no signs of weakness as we posted our strongest quarterly results since 2008, with Stolt Tank Containers leading the way with record earnings. Although shipment volumes were down, margins held firm, supported by our ability to secure space on container ships and higher demurrage revenue.
"At Stolt Tankers firmer spot rates helped offset higher bunker cost, and subsequent to quarter-end it appears that spot rates continue to match the increase in bunker cost. Increased utilisation and throughput volume at Stolthaven Terminals resulted in higher revenue and margins. And at Stolt Sea Farm, contrary to normal seasonal patterns where we usually experience a drop in prices and volume during January and February, sales volumes have held up very well. We were consequently able to maintain prices throughout the quarter.
“Just as we thought life would go back to “normal” after the pandemic, war breaks out in Ukraine. The central banks are raising interest rates, trying to curb inflation. Oil and gas prices are skyrocketing and a new outbreak of Covid is lurking in China. I can’t imagine a more difficult environment to give a quarterly guidance, but let me try. There have been no further newbuilding orders in the chemical tanker space. There is a drive to secure refined products away from Russia causing longer tonne-mile demand in the MR market resulting in swing tonnage beginning to exit the chemical trade.
"In times of uncertainty the product and chemical markets tend to secure additional storage capacity, so we predict a strengthening of utilisation and rates in Stolthaven Terminals. I expect shipments in Stolt Tank Containers to come down because of the demand destruction caused by the high container liner rates. The value of some of the products we carry in STC cannot justify these increased rates and the products could possibly move back to chemical tankers. However, I still believe margin and shipment volumes will give a record year for STC. I expect Stolt Sea Farm to have a similar year as in 2021.
“On March 7th we announced the purchase of 5% of the A-shares in Odfjell SE. This investment is driven by our belief in the chemical tanker industry and a pending recovery. Our investment has naturally prompted speculation about a potential merger between Stolt Tankers and Odfjell Tankers. I have previously spoken out about the need for consolidation in the chemical tanker industry and still strongly believe it is the best way to make our industry environmentally and economically sustainable.”
This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act.