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AGHL IPO helps Stolt-Nielsen in “weaker than expected” Q2

Stolt-Nielsen has reported a net profit of $31.1m for the second quarter, boosted by a $24.4m in one-off gains from the Avance Gas Holdings Limited (AGHL) IPO.

The April IPO of AGHL raised $100m in total, and after selling off 2.9m of its shares in the company, Stolt-Nielsen gas was left with a 14.1% stake in AGHL.

Stolt-Nielsen's profit before non-recurring items for the usually strong second quarter was $6.7m, down from $16.2m in the same period last year.

Stolt Tankers reported an $8.5m operating profit, with Stolthaven Terminals returning $11.8m.

Niels Stolt-Nielsen, ceo, commented: "Stolt-Nielsen Limited's second-quarter results were weaker than we expected. Operating results at Stolt Tankers, which typically strengthen in the second quarter, were down. Stolthaven's results were also weak, as rising operating costs and lower capacity utilisation at our terminals in Houston, New Orleans and Santos held down results. In contrast, Stolt Tank Containers had another good quarter on solid overall strength in global demand, though price competition continues to intensify.

The group's boss had particular concerns about the state of the tanker market. "We are concerned that the recovery of the parcel tanker market overall may be faltering. The cargo volume necessary to drive a market recovery has not materialised. In addition, access to low-cost capital and an abundance of yard capacity has been spurring an increase in the orderbook for chemical tankers, which has grown to 23.5% of existing fleet. 

"These and other factors, in our view, are reducing the likelihood of a typical cyclic recovery."

The forecast for the group's terminal business was brighter, as operating revenues rose to $52.3m and a slight slip in utilisation balanced an increase in capacity. "At Stolthaven, we expect utilisation to improve by year-end at our Houston terminal as our newly built tanks will be leased out and generate revenue... The fundamentals in our terminal business remain healthy," commented Stolt-Nielsen.

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