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Stolt Nielsen repeats concern on tanker outlook, despite Q3 profit

Stolt Nielsen repeats concern on tanker outlook, despite Q3 profit
Stolt Nielsen has reported a third quarter profit of $14.6m, down from a $20.8m profit recorded in the same period last year.

The company has expressed its concerns over the chemical tanker market as the orderbook continues to grow, outpacing demand growth.

Stolt Tankers' operating proft was $8.4m for the quarter, down on $9m in Q3 2013. Compared to the second quarter, available operating days dropped 1.9%, volumes fell 1.4% and spot freight rates were down by 5.8%, conspiring to knock revenues down to $318m from $323.4m. The company also reported an increase in contract freight rates.

Stolthaven Terminals returned an operating profit of $16.2m, another drop from 2013's $17.5m. The company's New Orleans terminal completed construction of a flood wall, a project that it is hoped will increase future productivity. The Q3 results include a $3m payout of business interruption insurance relating to the Stolthaven New Orleans from hurricane Isaac in 2012.

Niels Stolt-Nielsen, ceo of the group commented: "Contract freight rates strengthened at Stolt Tankers, though lower volumes continue to be a problem. At Stolthaven Terminals we saw improved performance at Houston, New Orleans and Newcastle, Australia."

"Looking ahead, we remain concerned about the market outlook for Stolt Tankers. Despite the third-quarter improvement at tankers, the orderbook for chemical tankers continues to grow in what is already a difficult competitive environment, with low volumes and significant volatility in spot rates." The comments echoed those he made In a recent interview with Seatrade Global when he said a lack of demand would keep the chemical market in a depressed state.

On the upside, the first nine months of 2014 were an improvement over the same period in 2013. That said, the strength of the recovery at Stolt Tankers has been below our expectations to date and looking forward into 2015 we do not foresee any signs of a substantial improvement."