Odfjell Q1 pre-tax pfts up 85% to $37m on strong tanker mkt

05 May 2004 14:58  [Source: ICIS news]

LONDON (CNI)--Improved market conditions plus lower bunker fuel costs helped Odfjell achieve an 85% leap to $37m (Euro31m) in first quarter pre-tax earnings, the Norwegian chemical shipping firm revealed on Wednesday.

 

Operating income in the first three months of 2004 doubled to $28m on sales up 12% at $246m. 

 

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 29% to $53m. Operating expenses as well as general and administrative expenses grew, mainly due to increased activity. Net interest expenses were also up.

 

Insurance payments from the loss of its chemical tanker Bow Mariner plus proceeds from sales of the Bow Queen and Bow Apollo contributed to a $9m capital gain in Q1.

 

For the full year, Odjfell confirmed that it expects a higher operating income due mainly to continued good results in the tank terminal segment.

 

The group explained that the world economy is recovering, and there is strong growth in China and the US as well as continued growth elsewhere in Asia.

 

Volume and spot rates in the chemical tanker market started to improve in late 2003 and such trends will continue in the next few years, the more so because new ships are becoming more expensive and the delivery lead times steadily longer, said Odfjell.

 

In the global trade segment, first quarter operating profits almost tripled to $27m from $10m. EBITDA grew 35% to $35m on sales up 15% at $173m. Improved market conditions led to time-charter income expressed in dollars per day rising some 9%. The average cost of bunkers was $153/tonne (after bunker clause compensations), compared to $163/tonne last time. Operating expenses on a comparable fleet basis were 5% lower.

 

Operating profits in the regional trade segment doubled to $2m despite sales falling 13% to $26m. EBITDA was flat at $3m. Results included Odfjell Ahrenkiel Europe which became operational on 1 January 2004 and is initially operating eight modern chemical tankers in inter-European trade.

 

Tank terminals operating profits rose 14% to $8m on revenues up 14% at $32m. EBITDA grew 18% to $13m. The EBITDA of Odfjell Terminals (Houston) was flat at $5m. Odfjell Terminals (Rotterdam) raised its EBITDA by 40% to $7m. The group’s share of the Ulsan, South Korea and Singapore terminals as well as the two terminals in China generated an EBITDA of $2m.

 

Operating profits from the tank containers segment were flat at $1m on revenues up 27% at $14m. EBITDA was also unchanged at $1m.

 

Odfjell said it has previously reported extensively on investigations by the US and European competition authorities of alleged antitrust violations in the parcel tanker sector. From wholly owned subsidiary Odfjell Seachem’s perspective, there are no further significant developments to report, it noted.

 

Last year, Odfjell Seachem agreed with the US Department of Justice (DoJ) to a fine of $42.5m over certain chemical tanker contracts of affreightment from 1998 to 2002.

By: Russell Ong
+44 208 652 3214

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