Odfjell also announced selling its share of a terminal in Singapore at a very attractive price in our view that strengthens the company’s cash position and reduces the need of increased external financing to cover the large CAPEX guided. We stick to our Buy recommendation at an unchanged Target Price of NOK 40/sh.

3Q results Should Reflect a One-Time Negative Hurricane Harvey’s Effect

Odfjell posts 3Q17 report next Thursday and we expect the figures to come in rather weak, impacted by Hurricane Harvey. Although the company said there were no material damages, closing of one of the main ports for several days should have a significant effect. We anticipate revenues of USD 201m, down 4% QoQ despite two new vessels on water – the company guided 3Q results to be “marginally lower than 2Q” before Hurricane Harvey struck Houston. We expect significantly lower adj. EBITDA QoQ and net earnings in a negative territory.

Singapore Terminal Sold at a Very Attractive Price

A high interest in Singapore Terminal from numerous potential buyers was declared in the last report and Odfjell managed to make a very successful deal in our view selling the terminal for USD 300m (received by Odfjell Terminals B.V. where Odfjell SE has 51% share) with an EV/EBITDA 16.7 vs. an estimated 10.6 for ODF this year. With a net gain of USD 135m, there will be no need of increased external financing to continue high CAPEX plans, while we were assuming previously the shortage in cash might occur.

Long-term Positive View Retained

2017 continues to be a difficult period for Odfjell, however, even with a supposedly bad quarterly results coming, we see this as a one-timer. Our long term positive view is retained and we reiterate Buy at an unchanged TP of NOK 40/sh.

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