Stolt-Nielsen Confirms Strong Third Quarter

Stolt-Nielsen Limited has reported unaudited results for the third quarter ending August 31, 2023 including a net profit of $90.1 million with revenue of $694.4 million.

This compares with a net profit of $8.3 million, with revenue of $721.9 million, in the second quarter of 2023. The second quarter included an incremental loss provision of $155.0 million (net profit impact of $105 million) related to the loss of the MSC Flaminia after a fire onboard in 2012.

The net profit for the nine months of 2023 was $198.2 million with revenue of $2,125.0 million, compared with a net profit of $185.6 million, with revenue of $2,039.3 million, in the first nine months of 2022.

Highlights for the third quarter of 2023 include a consolidated EBITDA of $200.3 million, down from $227.5 million. Stolt Tankers reported operating profit of $87.3 million, down from $96.8 million, as spot rates declined during the quarter.

Stolthaven Terminals reported operating profit of $26.0 million, down from $27.8 million, and Stolt Tank Containers reported operating profit of $23.9 million, down from an operating profit of $39.7 million.

Stolt Sea Farm reported an operating profit before fair value adjustment of biomass of $6.1 million, up from $4.4 million in the prior quarter, as the third quarter is a seasonally strong quarter.

Stolt-Nielsen Gas reported an operating loss of $3.4 million, compared to a loss of $2.7 million.

Corporate and Other reported an operating loss of $13.4 million compared to a $8.0 million loss in the prior quarter, reflecting amongst other things, pension related expenses and costs related to debt issuance.

Niels G. Stolt-Nielsen has retired from the position of Chief Executive Officer and assumed the role of Chairman of Stolt-Nielsen Limited. Udo Lange, appointed Chief Executive Officer on September 1, commented: “The third quarter results reflect the strong standing of the company and the strength of our diverse portfolio of businesses. Stolt Tankers had another strong quarter, benefitting from firm contract freight rates and improved volumes overall.

“The spot market, which came off the peak early in the quarter, has now stabilised. Stolthaven Terminals continues to enjoy high utilisation, which has enabled us to renew contracts with rate increases. At Stolt Tank Containers, we were able to increase shipment volumes, albeit at lower margins. For Stolt Sea Farm, the third quarter benefits from rising demand during the summer months, and this year we saw prices, for sole in particular, reach new record highs.

“Reflecting on our strong performance this quarter and my first few weeks at Stolt-Nielsen, I have been impressed with the strength of our businesses and the leading positions we enjoy in the markets where we operate. It is also good to see that we are operating in a market environment with ongoing positive momentum. Throughout the organisation our people are dedicated to excellence and possess a strong desire to do better for our customers and shareholders. I look forward to building on this positive energy as we drive the company forward.”

Whereas the chemical industry experienced declines in output during late 2022 and the first half of 2023, Lange expects this negative trend to reverse, with the global chemical industry expected to grow slowly again.

As the company heads into the contract renewal season at Stolt Tankers, a low newbuild orderbook and indications that swing tonnage will move away from the chemical segment as the outlook for product tankers improves. This is expected to provide a good foundation for steadily improving markets. Lange continues to remain optimistic that upcoming renewals will be made at strong rates and that the outlook for 2024 and beyond therefore remains positive.

At Stolthaven Terminals, the easing in chemical output seen over recent quarters has alleviated some of the tightness seen in global storage markets. However, this will be somewhat offset by ongoing demand for other bulk liquid products such as biofuels. Lange anticipates relatively stable earnings for the last quarter of the year.

Although the drop in margins that the company has recently seen at Stolt Tank Containers is stabilising, it is expected that results will weaken slightly for the fourth quarter. The company continues to focus on increasing volumes to compensate for some of the margin lost this year.
Niels G. Stolt-Nielsen retired from the position of Chief Executive Officer and assumed the role of Chairman of Stolt-Nielsen Limited.