"Disappointing Fourth Quarter" for Odfjell
Odfjell SE reported that fourth quarter shows EBITDA of $18 million, compared with $17 million in the fourth quarter of 2012. Time-charter results are down 5% compared with last quarter due to lower volume shipped. Impairment of net $76 million recognized related to Odfjell Terminals (Rotterdam) (OTR).
Activities slowed somewhat during the fourth quarter, Odfjell said, and combined with significant delays, scheduling constraints and ensuing cancellations, the result for the quarter trailed the previous quarter. The average rate per metric ton shipped was higher than the previous quarter; however, volume shipped was lower due to delays and scheduled off-hires. Bunker prices proved somewhat softer.
Our shareholding in tank terminals contributed an EBITDA of negative $0.6 million in the fourth quarter. With the exception of Odfjell Terminals (Rotterdam) (OTR), terminal results were mainly in line with our expectations. OTR however, has applied for a new environmental operating license, which has made it necessary to suspend further re-commissioning of old tank capacity. In the meantime, OTR is continuing to develop its long-term business plan. In line with the preliminary plan, and expected reduced available capacity and throughput level at the terminal in the coming years, an impairment of net $76 million was recognized in the fourth quarter in respect of certain assets, including customer relations and goodwill.
The U.S. posted its strongest GDP growth for the last three years on the back of a substantial acceleration in private sector demand led by stronger consumer spending and a significant pickup in exports. The European economy has continued its gradual improvement, with Germany and the U.K. leading the way. China's economic growth is decelerating, with growth of still healthy 7.7% in the fourth quarter, but somewhat weakening exports and investments. The fundamentals within the LPG/Ethylene segment continue to improve, and we expect stronger earnings in 2014 for our gas carriers. The U.S. shale gas and oil resurgence is breathing new life into the US chemical industry. Based thereon, we expect a slow but steady increase in demand for Odfjell's services.
Odfjell said it expects first quarter of 2014 to be slightly better than the fourth quarter in 2013 for our company's chemical tankers. With regard to terminals, with the exception of OTR, we expect continued stable results.