16 TANKS & LOGISTICS
QUICK OFF THE BLOCKS RESULTS • STOLT-NIELSEN HAS MADE A BLISTERING START TO ITS 2022 FINANCIAL YEAR, WITH ALL ITS LOGISTICS OPERATIONS MAKING AN IMPROVED CONTRIBUTION DESPITE SUPPLY CHAIN PROBLEMS STOLT-NIELSEN LTD has reported revenues of $606.2m for its first fiscal quarter of 2022, the three months to end February; this represents a 2.6 per cent increase over the prior period and is 13.8 per cent up on the first quarter 2021. Operating profit also improved strongly, rising by 19.2 per cent over the fourth quarter of last year to $91.8m, well ahead of the $36.0m posted for the same period last year. Net profit increased from $2.5m in first quarter 2021 to $52.3m. “Typically the first quarter of the year is the seasonally weakest quarter for our businesses,” notes CEO Niels G Stolt-Nielsen. “However, this year the first quarter showed no signs of weakness as we posted our strongest quarterly results since 2008, with Stolt Tank Containers leading the way with record earnings. Although shipment volumes were down, margins held firm, supported by our ability to secure space on container ships and higher demurrage revenue. At Stolt Tankers firmer spot rates helped offset higher bunker cost, and subsequent to quarter end it appears that spot rates continue to match the increase in bunker cost. Increased utilisation and throughput volume at Stolthaven Terminals resulted in higher revenue and margins.” AROUND THE TEAMS Stolt Tankers saw revenues rise by 2.2 per cent compared to the previous period, to $314.5m, despite a fall in operating days and volumes. Freight rates were up, largely as a result of a 14.3 per cent increase in spot rates. Operating profit came in at $25.0m, up from $19.2m in the previous quarter, reflecting
HCB MONTHLY | APRIL 2022
better revenues from the deepsea fleet and lower expenses from subletting, barging and transhipment. Stolthaven Terminals increased revenue from $62.1m in the previous period to $66.1m, with higher rates and increased utilisation, which rose from 92.8 per cent to 96.3 per cent at Stolt’s wholly owned facilities. First quarter operating profit of $22.0m represented a strong recovery after the previous period’s $8.4m, though that was impacted by a $10.0m impairment charge. Nevertheless, operating expenses were up, reflecting the higher levels of activity, although Stolthaven, like Stolt Tankers, managed to reduce administrative and general expenses. Stolt Tank Containers (STC) reported first quarter revenues of $195.3m, up from $191.5m in the prior quarter, despite a 6.0 per cent drop in the number of shipments. This was partly offset by an increase in transport rates,
reflecting the continued rise in ocean freight and trucking costs. Demurrage revenue also continued to increase, driven by bottlenecks in the logistics chains. Looking forward, the picture is difficult to read. As Niels G Stolt-Nielsen says: “Just as we thought life would go back to ‘normal’ after the pandemic, war breaks out in Ukraine. The central banks are raising interest rates, trying to curb inflation. Oil and gas prices are skyrocketing and a new outbreak of Covid is lurking in China. I can’t imagine a more difficult environment to give a quarterly guidance, but let me try. “There have been no further newbuilding orders in the chemical tanker space,” he adds. “There is a drive to secure refined products away from Russia causing longer tonne-mile demand in the MR market resulting in swing tonnage beginning to exit the chemical trade. In times of uncertainty the product and chemical markets tend to secure additional storage capacity, so we predict a strengthening of utilisation and rates in Stolthaven Terminals. I expect shipments in STC to come down because of the demand destruction caused by the high container liner rates. The value of some of the products we carry cannot justify these increased rates and the products could possibly move back to chemical tankers. However, I still believe margin and shipment volumes will give a record year for STC.” www.stolt-nielsen.com
