---

Stolt-Nielsen S.A. reported a $7.2 million rise in operating profits but said profits continued to be impacted by increased bunker fuel costs and a weaker dollar.

The Norwegian shipping group posted operating profits of $52.2 million, up from profits of $45 million recorded last year and ahead of the $51 million profit forecasted by analysts. The company had reported profits of $54.6 million in the first quarter of this year.

Profit from continuing operations for the first half of 2008 was $83.1 million, up from $82.1 million in the first half of 2007.

Sales, meanwhile, came in at $504.5 million for the second quarter, up from $438 million a year ago and above the $482 million estimate predicted by market experts.

Commenting on the company's results Niels G. Stolt-Nielsen, Chief Executive Officer said demand in all of Stolt-Nielsen's markets remained healthy in the second quarter "with good volumes on global parcel-tanker tradelanes and continued high levels of utilization at both Stolthaven Terminals and Stolt Tank Containers."

Second-quarter profits were, however, held down by rising operating costs "driven primarily by higher fuel prices and a weaker U.S. dollar," he said.

"The average price paid for bunkers increased to $550 per ton at the end of the second quarter from $495 per ton at the end of the first quarter."

Stolt-Nielsen said margins at its tankers division Stolt Tankers continued to decrease "as a result of significant increases in operating costs particularly bunkers, which we were not able to recover fast enough through surcharges and freight increases."

Commenting on the potential impact of the economic slowdown on demand, the company said "We have not seen any significant changes in demand for our parcel-tanker services in the last quarter, despite the current weakness in some sectors of the global economy."

"Neither have we seen any impact on the market due to the increasing number of newbuildings being delivered."