Sales for the first quarter of 2010 increased 9.2% year on year to $428.3m, the Norway-listed chemical tanker group said.

Net profit in the first quarter fell 16.5% from the $22.4m recorded in the fourth quarter of 2009, on the back of weaker results from the group’s Stolt Tankers division due to poor market conditions, and costs associated with the start-up of Stolt-Nielsen Gas.

“Our first-quarter results reflect the challenging market conditions that we have consistently communicated to the market over the past several quarters,” said Niels Stolt-Nielsen, chief executive officer of Stolt-Nielsen SA (SNSA).

“Poor first-quarter operating results reflected the significant oversupply of ships, which has brought freight rates below voyage-cost levels. We expect this situation to improve as new Middle East gas production reaches the market later this year,” he added.

Looking ahead, Stolt-Nielsen was unsure on the sustainability of a strong recovery in China once stimulus measures were cut back.

“As the traditional Chinese export markets are buying less, China in turn becomes more dependent on its domestic demand, which will take some time to develop. We therefore repeat our concerns about the market fundamentals going forward,” he said.

The CEO added that the company’s strategy was to operate the businesses in a conservative manner, exercising tight control over costs and capital expenditures.