Stolt-Nielsen posted its strongest quarterly results since 2008 in the first three months of 2022 – traditionally the weakest time of the year – driven by chemicals logistics arm Stolt Tank Containers, the Norway-headquartered firm said on Thursday.
The company is bullish about merger opportunities, including a potential acquisition of Odfjell’s tanker business following a small investment in the Norway-based chemicals transportation and storage firm.
Stolt-Nielsen took a 5% stake in Odfjell SE earlier in March.
“Our investment has naturally prompted speculation about a potential merger between Stolt Tankers and Odfjell Tankers,” said outgoing company CEO Niels Stolt-Nielsen.
“I have previously spoken out about the need for consolidation in the chemical tanker industry and still strongly believe it is the best way to make our industry environmentally and economically sustainable,” he added. Stolt-Nielsen is set to retire once a replacement CEO has been identified.
($m) Q1 2022 Q4 2021 Q1 2021
Revenues 606.2 593.1 480.2
Operating profit 91.8 77 36
Net profit 52.3 35 2.5
– Shipment volumes fell during the quarter, but operating profit at Stolt Tanker Containers rose year on year and quarter on quarter to $40m, and margins remained firm.
– Normal seasonal patterns for ocean chemical shipping saw demand fall in January and February, but pricing and volumes held firm during the period, the company said. Supply chain issues continue to prevail.
– The extent of freight rate pricing is likely to result in some demand destruction in the near future, according to the CEO, because lower-margin products may not be viable to ship at projected pricing levels.
“I expect shipments in Stolt Tank Containers (STC) to come down because of the demand destruction caused by the high container liner rates,” Stolt-Nielsen said.
“The value of some of the products we carry in STC cannot justify these increased rates and the products could possibly move back to chemical tankers,” he added.
Despite current demand levels, there is little momentum in the sector to build out chemicals transport capacity.
“There have been no further newbuilding orders in the chemical tanker space,” Stolt-Nielsen said.
Source: Hellenic Shipping News