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STOLT-NIELSEN IS ALWAYS the first of the major chemical logistics firms to report its financial results, due to the fact that its financial year ends on 30 November. As a result, its first-quarter report, which covers the three months to end-February 2020, is the first chance to see exactly what impact the Covid-19 pandemic is having on business. In fact, the virus had not spread widely around the world by the end of February and it was only the extended Chinese New Year break that had any great impact. However, the three-month period also covered the arrival of the ‘IMO 2020’ rule
the company’s balance sheet. However, the company says, it has been unable at this point to quantify possible impairments of long-term assets, as it is still difficult to gauge the evolution of the pandemic and the effects it might have on the value of the company’s assets and on its operations. As Niels G Stolt-Nielsen, CEO of StoltNielsen Ltd, says: “While the effects of the Covid-19 pandemic have substantially altered our outlook for 2020, Stolt-Nielsen Ltd’s first quarter results were only slightly impacted.” Overall, group revenues of $498.8m were
WHERE WE STAND Stolt-Nielsen’s first quarter results were released on 16 April, giving the company a chance to make some observations on the impact of Covid-19 on operations during the first half of its second quarter. Niels G Stolt-Nielsen says: “As the pandemic has escalated in the six weeks since the end of our first quarter on 29 February, the impact on our businesses has so far remained relatively modest. At Stolt Tankers, contract volumes remain relatively healthy and contract renewals continue with improved terms, though we are experiencing some port delays. Spot volumes in most markets, so far, have also been holding up. “Stolthaven Terminals has seen an increase in enquiries for storage in most of its terminals, so utilisation is up, but throughput is slightly down. Stolt Tank Containers continues to see a robust market, reporting a record number of shipments in March and utilisation of 71 per cent, the highest we have seen in recent years, while we are also seeing increased inquiries
restricting the sulphur content of maritime bunker fuels, which certainly did have a marked impact on Stolt Tankers’ results. Stolt-Nielsen notes that, under the International Financial Reporting Standards (IFRS), the Covid-19 pandemic constitutes an event that triggers an impairment review of
$1.3m up on the prior period and $3.1m below the year-earlier level. Operating profit, though, was well down at $16.6m compared to $46.8m in the fourth quarter of 2019, with a sharp downturn in profitability at Stolt Tankers, Stolt Tank Containers and Stolt Sea Farm.
by customers to use containers as storage. However, we continue to have significant repositioning costs as a result of the rapidly changing trade flows.” Stolt-Nielsen is, though, more worried about what may come next: “I believe it is just a matter of time before we see a significant slowdown.
RESULTS • THE ARRIVAL OF THE IMO 2020 RULE IMPACTED STOLT TANKERS’ PROFITS BUT THE STOLT-NIELSEN GROUP IS MORE CONCERNED ABOUT THE LIKELIHOOD OF GLOBAL RECESSION
HCB MONTHLY | MAY 2020
