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BEHIND THE CURTAIN RESULTS • ODFJELL REPORTED ITS BEST FIGURES FOR FOUR YEARS IN 2020 DESPITE THE PANDEMIC’S DISRUPTIONS, BUT THE FOURTH QUARTER HINTS AT TROUBLE TO COME
ODFJELL ACHIEVED REVENUES of $1.01bn in 2020, up 6 per cent on the 2019 figure, with EBITDA rising 34 per cent to $289.5m on the back of lower voyage, timecharter and operating costs. Net profit came in at $27.9m compared to a loss of $36.6m in 2019. All the improvement came from Odfjell’s chemical tanker operations, with its tank terminal division once more posting comparatively stable results. “Despite the pandemic, we have delivered stronger results and performed on important operational and safety measures,” says Odfjell CEO Kristian Mørch. “We have concluded the
largest fleet renewal programme in our history and taken important steps by further streamlining our terminal division.” While Odfjell performed well over the year as a whole, the fourth quarter showed some weaknesses that are expected to persist into 2021. Although chemical demand remained firm, the chemical tanker market was weak, with more offhire days and higher fuel costs also eating into profitability. A major factor has been weakness in the clean petroleum product (CPP) tanker sector, attracting swing tonnage back into easy chemicals, which is expected to continue to affect the spot market.
Odfjell is sticking to its decision not to renew contracts of affreightment (COAs) at unsustainable prices, though, and says it achieved an overall 3 per cent increase in COA rates in the fourth quarter. FLEET DEVELOPMENTS Odfjell has continued to build its fleet towards its target of 100 ships and during the fourth quarter established two new pools for coated chemical tankers. The MR pool will include six vessels from Navig8 Chemical Tankers, one from Transportation Recovery Fund (TRF) and six from Odfjell. The Handy pool will have six vessels from TRF. “The establishment of these pools adds further flexibility to our operational platform and adds economies of scale by adding incremental revenues with marginal added costs,” Odfjell states. Navig8’s six vessels arrived under Odfjell’s commercial management towards the end of the fourth quarter, while two TRF ships joined the fleet near the end of the year. The remaining five TRF tankers were due to join Odfjell by the end of the first quarter 2021. During the fourth quarter Odfjell also concluded its newbuilding programme with the delivery of the 38,000-dwt Bow Excellence, a stainless steel tanker. Some changes have been made to timechartered tonnage, adding some capacity and extending some existing deals. Three 25,700-dwt stainless steel newbuildings are due from Asakawa in 2022 and 2023 under timecharters but Odfjell now has no owned tonnage on order. In the market as a whole, the appetite for new contracting remains low. Owners are, not surprisingly, lacking confidence in demand until the Covid-19 pandemic eases, while they are also unsure about the choice of propulsion systems to meet future emissions restrictions. Those factors are also limiting access to capital in light of increased residual risk. The global chemical tanker orderbook now stands at 5.6 per cent of the existing fleet and, with expected retirements of older vessels, Odfjell is projecting annual fleet growth of just 1 per cent over the next three
HCB MONTHLY | MARCH 2021
