Stolt-Nielsen Limited (Oslo Børs: SNI) today reported unaudited results for the third quarter ended August 31, 2011. Net profit attributable to shareholders in the third quarter was $22.4 million, with revenue of $529.8 million, compared with $32.4 million and $528.0 million, respectively, in the second quarter of 2011.
Highlights for the third quarter of 2011, compared with the second quarter of 2011, were:
• Stolt Tankers reported operating income of $6.6 million, compared with an operating loss of $3.5 million, reflecting an improvement in spot freight rates compensating for higher bunker costs. Second-quarter operating income reflected an impairment loss of $8.5 million taken on assets held for sale.
• The Stolt Tankers Joint Service Sailed-in Time-Charter Index[1] rose to 1.08 from 1.05.
• Stolthaven Terminals reported an operating profit of $15.8 million, up from $15.7 million, with continued strength in demand and throughput.
• Stolt Tank Containers reported an operating profit of $18.2 million, down from $18.9 million, reflecting the impact of seasonal market conditions.
• Stolt Sea Farm reported an operating loss of $0.2 million, compared with an operating profit of $9.3 million, reflecting a negative adjustment of $4.0 million from the fair value accounting for inventories, compared with a positive adjustment of $5.9 million.
• Stolt-Nielsen Gas reported net income of $0.3 million on its investment in Avance Gas Holding Ltd (AGHL), compared with a net loss of $1.8 million, reflecting the turnaround in the very large gas carrier (VLGC) market in the third quarter.
Commenting on the Company's results, Mr. Niels G. Stolt-Nielsen, Chief Executive Officer of Stolt-Nielsen Limited ("SNL"), said "Stolt-Nielsen Limited's third-quarter operating results were similar to those in the previous quarter, when excluding the effects of one-time items and the impact of fair value accounting adjustments of inventories at Stolt Sea Farm. The chemical tanker market continues to slide sideways. We have seen a slight firming of spot freight rates in response to higher bunker prices and other operational costs. Contract renewals and overall volumes on our deep-sea trades also edged upward in the quarter. Results at Stolthaven Terminals remained on track, with another consistent performance. Stolt Tank Containers experienced a seasonal slowdown, but results were only slightly lower than the previous quarter. Results at Stolt Sea Farm were held down by a negative adjustment to the fair value of inventories, as prices declined toward the end of the quarter. Finally, we saw the long-awaited turnaround of the VLGC market, with improved freight rates and reduced waiting times between loadings. This bodes well for the next quarter."
"We have stated for some time that we do not expect a significant improvement in the parcel tanker market before 2013. That still stands, driven by the dissipating orderbook of chemical tankers and the lack of new orders in the works. So unless the present debt crisis triggers a global recession, we believe the supply and demand balance will move in our favour in the time frame stated. We expect Stolthaven Terminals and Stolt Tank Containers to continue to deliver strong results driven by good business fundamentals overall. There has been a significant turnaround in the VLGC market, which should be reflected in our fourth-quarter results and expected to continue in 2012. We look for improved contributions to our bottom line over the long term from Stolt Sea Farm and from Stolt Bitumen Services. We will continue to protect our strong balance sheet and healthy liquidity position, which should enable us to ride out whatever comes our way."