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Odfjell back in the red

Odfjell back in the red
Oslo: A slight seasonal uptick in Q4 charter rates was not enough to reverse the fortunes of Odfjell as their net losses for 2012 hit $111m.

The Norwegian chemical transport and storage group attributed its poor earnings to a weak chemical tanker market and significant losses at its Rotterdam terminal, while high bunker prices added to their overheads.

Odfjell Terminals Rotterdam was shut down in July 2012 for breaching safety standards, an incident that resulted in the loss of a storage contract with Shell after improvements were not made in good time. The Rotterdam tank terminal delivered negative EBITDA of $9.8m in Q4 and negative EBITDA of $20m in Q3.

The Odfjell fleet grew by four ships in 2012 as the owner balanced 13 deliveries with nine sales, seven of which went to recycling yards. In 2013 deliveries will include a 75,000 dwt zinc coated tanker from Daewoo which will be the largest chemical tanker in the world. A third and final 9,000 dwt stainless steel chemical tanker from China will be the only other delivery this year ahead of a four vessel new build programme from Hyundai Mipo Dockyard due for delivery in 2014.

Odfjell was in profit for 2011 with $269m on bottom line, although this was largely because of a $288m net result from discontinued operations. Asset sales and a $247m transaction with Lindsay Goldberg (LG), who acquired a 49% stake in a number of tank terminals and green field projects, masked a continued operation loss of $13m for 2011.

In December 2012, Odfjell signed a letter of intent to expand their existing joint venture with LG, bagging a $226m cash injection for the Norwegians. The deal is expected to close in Q1 2013.

Looking forward the company insists that the supply/demand picture is moving in their favour, although the supply overhang may be prolonged. The company's main concerns for 2013 are challenging markets and high fuel costs.

TAGS: Europe Tankers
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