Odfjell SE Reports Progress in Chemical Tanker Market
Odfjell released its second quarter 2013 results and reported a EBITDA of $6 million in the second quarter is reflecting a better utilization of our chemical tanker fleet and a somewhat better market. The company said time charter results are up 8% compared with last quarter.
Odfjell said the second quarter of 2013 turned out better than expected due to better fleet utilization and a somewhat better chemical tanker market. We experienced steady nomination of contract cargos and improved spot rates. Earnings on a time-charter basis ended up 8% compared to the previous quarter, and the average freight rate per metric ton shipped increased by 2%.
In second quarter our 51% shareholding in tank terminals business contributed an EBITDA of $7 million, compared to $9 million in the previous quarter.
In June Odfjell concluded the transaction with Lindsay Goldberg to expand our existing partnership to include substantially all tank terminal assets. Several new tank terminal projects are being developed in China, U.S. and Europe. In June we signed an agreement to enter into a joint venture with the Founder Group to become 50/50 partners for the development of a petrochemical tank terminal in Quanzhou, Fujian Province, China. In August we signed a Letter of Intent to purchase Chem-Marine Corporation in South Carolina, U.S. Chem-Marine controls a 10.2 hectare site and is located adjacent to our tank terminal currently under construction in Charleston, South Carolina.
Chinese growth is at a somewhat lower level than expected, and is poised for the weakest expansion since 1990. Key Euro zone statistics have favorably surprised the markets in the past quarter. The development of the U.S. shale gas industry is providing cheaper energy and feedstock for the U.S. chemical industry.
Based on the above macro-economic picture, and the fact that there are no material changes to the supply/demand situation, we believe that the next 12-24 months will see an improvement in our segments. However, given the continued underperforming overall global economic growth, combined with the "supply overhang" of ships we only expect the second half results of 2013 to be moderately better than the previous two quarters