Shipping and tank terminal company Odfjell has reported a net result of 100 mill. $, compared with net result of -36 mill. $ in 2015. The company sees market balance ahead but expects further pressure on rates during 2017.
Full year EBITDA improved to 238 mill. $ from 190 mill. $[ds_preview] in 2015. The quarterly net result of 43 mill. $ includes the sale of Odfjell’s Oman terminal in December – which resulted in capital gain of 44 mill. $ – and also inlcuded impairments of 16 mill. $ and other financial gains of 16 mill. $. Chemical Tankers EBITDA in fourth quarter was 36 mill. $ compared wi th 48 mill. $ in third quarter. In January 2017 Odfjell successfully completed a new unsecured bond issue of 700 mill. NOK (84.2 mill. $).
The 4Q16 results developed weaker than 3Q16 – this development was in line with the group’s expectations. The main driver for the weaker results was a decrease in contract nominations and increased voyage expenses mainly due to an increase in fuel prices. The reduced contract nominations were mitigated by a significant increase in spot volumes. However, these volumes were at lower rates, which reflected market sentiment during the quarter. Average bunker prices paid were 310 $/tonne in fourth quarter, up from 275 $/tonne the previous quarter.
»Our markets remained challenging, but Odfjell continues to build both financial and operational strength. Based on our strengthened position we are now launching our new strategy – the Odfjell Compass which will be leading the company into the future,« Kristian Mørch, CEO Odfjell
In a longer perspective Odfjell sees the market fairly balanced, but rates are expected to be under pressure in 2017. After a slight improvement in spot chemical freight rates recently and contract nominations returned to normal, the company expects that the 1Q17 timecharter results will be in line with or marginally better than in 4Q16. Odfjell Terminals 2017 results are expected to be improved on continued strengthened performance at Odfjell Terminals.
Odfjell still faces substantial delays to the Gas vessels ordered in China. In December the 4th of eight newbuilding contracts was cancelled, and it is likely that the remaining vessels are cancelled in accordance with the contracts, it was said. All instalments including accrued interests on cancelled contract have been repaid. According to the company instalments paid on the remaining orders are secured by refund guarantees from reputable financial institutions.
