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Solid second quarter slashes Odfjell first half loss by 50%

Solid second quarter slashes Odfjell first half loss by 50%
Second quarter losses at tanker and liquid storage outfit Odfjell fell to $2m from a $28m loss in the same period last year.

The results helped narrow the loss in the first half of the year to $15m, slashing 2012's $32m loss in half.

The end of Odfjell's joint venture with Saudis National Chemical Carriers saw 13 vessels redelivered to the Bahri subsidiary resulting in a drop of cargo volumes at Odfjell, and a jump in contract coverage to 56%.

Subsequently,revenues for the chemical tanker business fell from $269m in 2012 to $255m this year and EBITDA more than doubled to $30m from $13m. Time charter rates rose 8% and freight rates rose 2% on a per tonne basis.

In June Odfjell took delivery of the world's largest chemical tanker, the 86,000 cu m Bow Pioneer, from Daewoo Shipbuilding and Marine Engineering, the remaining four 46,000 dwt chemical tankers being built at Hyundai Mipo Dockyard are on schedule for their January-July 2014 delivery dates.

The company's tanker terminal business went into in expansion mode in the quarter, Lindsay Goldbern injected $219m in June, Founder Group signed a jv with Odfjell for a tanker terminal in Quanzhou, Fujian province and Odfjell signed a letter of intent to purchase a site in South Carolina, USA.

EBITDA fell for the tanker terminal business from $13m in Q2 2012 to $7m this year, including one off items totalling $3m relating to the ongoing trouble at Odfjell Terminals Rotterdam.

The company forecasts only moderate increases in profit for the second half of 2013 due to the supply overhang and general global economic picture. Improvement is expected in the next 12-24 months, however.