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STRONG AND STABLE FINANCIALS • STOLT-NIELSEN HAD A GOOD SECOND QUARTER, ILLUSTRATING THAT UNCERTAINTY AND VOLATILITY ARE NOT ALWAYS BAD FOR LOGISTICS OPERATORS
The financial markets are clearly comfortable with this approach: a NKr 1.25bn ($130m) unsecured bond issue in mid-June was significantly oversubscribed.
STOLT-NIELSEN LTD IS always the first to release its quarterly results, so the publication of its second quarter figures, which cover the three months to end May, offered the first opportunity to assess the impact of the Covid-19 crisis on operations and profitability. And, on the surface at least, it would appear that, if anything, Stolt-Nielsen has benefitted from the changing conditions. The sole exception is the Stolt Sea Farm business, which has suffered from the closure of its restaurant and catering customers. Group revenues for the quarter came in at $503.5m, ahead of the $497.1m reported
our businesses, excluding Stolt Sea Farm, has so far been relatively modest. That said, we are seeing indications that the third quarter will be more challenging.” Given the uncertainty resulting from the pandemic, the company has taken “extensive actions” to reduce costs and improve liquidity. “We have thus far improved our cash position by $83m through cancellations or delays of capital expenditures, as well as reductions in operating and administrative and general expenses,” Niels G Stolt-Nielsen says. “In addition, the Board of Directors temporarily cut board fees by 50 per cent, and our senior
TALKING TANKERS Stolt-Nielsen’s largest division in revenue terms is its tanker shipping operation, Stolt Tankers. Revenues here rose from $280.7m in the first quarter to $293.9m, driven in no small part by an increase in chemical exports from the US Gulf to China and India following the reopening of markets in the region. Cargo volumes in deepsea operations increased by 8.8 per cent over the quarter, with an increase in both operating days and capacity utilisation, although this had little impact on spot rates. Revenue growth was held back by a swing in bunker surcharge revenue as bunker prices dropped sharply compared to the first quarter. Stolt’s regional fleets enjoyed higher fleet revenue but this was offset by the drop in bunker surcharges
for the prior period but slightly down on the year-earlier figure of $518.0m. Operating profit of $49.4m was, though, well ahead of the first quarter’s $17.6m and also up on the prior year’s $43.3m. Niels G Stolt-Nielsen, CEO, says: “The net financial impact of the Covid-19 pandemic on
management team took a voluntary salary cut of 20 per cent, both effective April 1. We are also diligently working to protect our revenue base, which includes working closely with customers to create solutions to help them adapt in this constantly changing environment.”
and lower demurrage revenue. The fall in bunker prices did, though, improve profitability, with operating profit rising from $4.7m in the first quarter to $20.0m. “At Stolt Tankers, overall volume improved in the second quarter, driven mainly by strength in deepsea shipments, reflecting less MR tonnage
HCB MONTHLY | SEPTEMBER 2020
