The soft chemical tanker market lowered th[ds_preview]e 2016 profit of tanker operator Stolt-Nielsen by 15%. Looking at newbuilding deliveries in 2017, combined with a weak product tanker market, the company believes the year will be challenging.
Stolt-Nielsen’s net profit attributable to shareholders in the fourth quarter was 22.8 mill. $, with revenue of 463.0 mill. $, compared with a net profit of 22.2 mill. $, with revenue of 474.1 mill. $, in the third quarter of 2016. Net profit attributable to shareholders for 2016 was 113.1 mill. $, with revenue of 1,879.9 mill. $, compared with a net profit of 132.7 mill. $, and revenue of 1,983.7 mill. $ in 2015.
Stolt Tankers reported an operating profit of 30.4 mill. $, down from 31.4 mill. $, as the chemical tanker market remained soft. The Stolt Tankers Joint Service Sailed-in Time-Charter Index decreased to 0.72 from 0.76. Stolthaven Terminals reported an operating profit of 14.0 mill. $, down from 14.8 mill. $.
Stolt Tank Containers‘ operating profit climbed to 15.1 mill. $, up from 10.7 mill. $, reflecting a combination of higher profit margins due to lower ocean freight and repositioning costs, and lower administrative & general expenses.
Corporate and Other reported an operating loss of 10.0 mill. $, compared with a loss of 6.7 mill. $, due in part to a 2.7 mill. $ impairment for doubtful accounts receivable at Stolt Bitumen Services and costs of 2.2 mill. $ related to the acquisition of Jo Tankers.
Commenting on the Company‘s results, CEO Niels G. Stolt-Nielsen, said: »Stolt-Nielsen‘s fourth-quarter results were essentially in line with our expectations. At Stolt Tankers, the softness we observed in the prior period continued into the fourth quarter. Stolthaven‘s results were essentially flat this quarter, though utilisation continued to edge upward, reflecting continued progress toward our goal of sustainable improvements in operational performance. At Stolt Tanker Containers, while total shipments were seasonally down, improvements in transportation margin per shipment suggest that price competition may be easing.«
Still an oversupply of tonnage
Stolt-Nielsen’s outlook for 2017 remains largely unchanged from our previous guidance. In the markets served by Stolt Tankers, there is still an oversupply of tonnage, and with significant newbuilding deliveries in 2017, combined with a weak product tanker market, the management believes the year will be challenging.
However, with its COA portfolio and continued focus on cost reductions, the company expects Stolt Tankers to remain profitable in the year ahead. »For Stolt Tank Containers, which faced intense price competition in 2016, we see signs of a bottoming out of the margin deterioration, as profitability can be sacrificed by some operators for only so long in an effort to gain market share«, Stolt-Nielsen said.
