During second quarter we have seen a steady improvement of the chemical tanker market in general with improved of earnings both in the deep-sea segment as well as in the remaining regional operations. The Odfjell chemical freight index (ODFIX) was up 5% compared with the previous quarter.

Continued improved results are seen from Odfjell Terminals with an EBITDA of USD 18 million first half 2015. Performance was driven in part by the high demand for spot and mid-term storage due to contango in the oil market.

The cost-cutting and efficiency programme is progressing as planned with all cost reduction initiatives on schedule.

Third quarter 2015 is expected to be similar to the second quarter for chemical tankers on a further reduced cost base, but with a slightly softer market. With regard to the terminals, Odfjell expects stable to improved earnings on capacity expansions and continued positive development at Odfjell Terminals (Rotterdam).

Tank Terminals

Odfjell’s shareholding in the tank terminals business delivered an EBITDA of USD 9.3 mill in the second quarter, up from USD 9 mill in the previous quarter. Performance was driven in part by the high demand for spot and mid-term storage due to contango in the oil market.

Additional available capacity at our terminals in Houston and in Charleston contributed to a slight increase in the EBITDA of our North American terminals. Odfjell Terminals (Rotterdam)’s distillation (PID) business and reorganization strategy implemented last year have improved the results further, and the EDITDA was reduced to negative USD 1.6 mill compared with negative USD 2 mill in the previous quarter. Additionally, all terminals benefit from the cost saving plans implemented last year.

The Tank Terminal Group as a whole has improved its commercial occupancy rate to 92%, versus 91% last quarter and 87% by the end of December, largely due to the progress in Rotterdam, Charleston and Korea. Our terminal in Tianjin, located in a new industrial development area, was not directly affected by the explosion in the Tianjin old harbour earlier this month. However, the event will most likely delay action on permits, and we now expect that the operations will commence in October.

Odfjell Terminal (Rotterdam)’s commercially available occupancy as per end of second quarter was 93%, last quarter was 87%. The four distillation columns were fully operational at the end of the quarter. Additional commercial tank capacity has become available ahead of schedule. In the second quarter additional 4% of capacity was added, with a total of 860,000 cbm being commercially available by end of June compared with 826,000 cbm as of end previous quarter. With the current market activity, we expect to add further capacity.