September 02, 2019 [Tank News International] – Odfjell SE today reported its results for the second quarter of 2019. The results reflect an improving chemical tanker spot market and improved contract renewal rates.
The company recorded an EBITDA of $57 million, compared with $47 million in 1Q19, and an EBITDA of $50 million from Odfjell Tankers compared with $40 million in 1Q19. Spot rates on main tradelanes improved by 7 percent compared to 1Q19, and COA rates (renewals) are up 6 percent YTD 2019.
“We are pleased to report continued improvements in our results for the second quarter. The improvement in both spot and COA rates are still modest, but we continue to believe that we are at an early stage in the recovery of the chemical tanker market. We expect the next quarter to be slightly affected by seasonal slowdown in the chemical tanker market, but we still expect to report figures in line with the second quarter”, said Kristian Mørch, CEO of Odfjell SE.
Meanwhile Odfjell Terminals reported an EBITDA of $6 million compared to $7 million in 1Q19. In July, Odfjell completed the sale of its ownership in Odfjell Terminals Jiangyin, which will result in an equity gain of $14 million and net cash gain of $21 million in the third quarter.
The main changes in net results compared to 1Q19 were driven by a $1.6 million impairment related to the Ethylene project in Houston, after this project did not materialise. Total average occupancy rate of commercially available capacity remained at a stable level of 93 percent. The total average available capacity decreased slightly by 3,342 cbm to 1,487,055 cbm.
Odfjell Terminals US reported stable EBITDA with slightly reduced results from the Charleston terminal being offset by continued strong results from the Houston terminal. Utilisation at the Houston terminal was 100 percent for the quarter and the terminal continues to benefit from a strong storage market with high throughput activity.
Total approved capital expenditure (Odfjell SE share) is $7 million for 2019-2021, of which $4 million is for maintenance and $3 million is for expansion.
“Our capital expenditure programme for the U.S. will be updated when a new strategy has been concluded together with our new JV partner at the U.S. terminals,” the company said in its report. The Lindsay Goldberg exit process from Odfjell Terminals Asia is ongoing. Odfjell expects the process to be concluded in 2H19 or early 1H20.
“We expect next quarter to be slightly affected by the seasonal slowdown in the chemical tanker market, but expect to report figures in line with the second quarter. We continue to believe that the chemical tanker market is on a firming trend. We expect results from Odfjell Terminals to be stable for the remainder of 2019.”
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