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In its preliminary results for the full year and fourth quarter of 2016, Norwegian shipping company and terminal operator Odfjell reports that the average bunker price paid in the last three months of 2016 was higher than during the third quarter (Q3).

On average, Odfell says it paid $310 per tonne in the fourth quarter, which was $35, or 12.7 percent, higher than the $275 per tonne mean price paid in the previous three-month period.

However, Odfjell's net quarterly bunker cost of $342 per tonne before hedging in the fourth quarter was $23, or 6.3 percent, lower than in Q3 ($365 per tonne).

Also, in comparison with the $371 per tonne figure recorded for the corresponding quarter in 2015, the result was $29, or 7.8 percent, lower.

The company's net bunker cost per tonne for the full year (including the effects of bunker adjustment clauses and derivatives) was $350 per tonne, which is a drop of $82, or 19.0 percent, compared to 2015 ($432 per tonne).

In the fourth quarter, Odfjell posted quarterly net bunker costs of $34.1 million, including $28.0 million in bunker purchases. The figure was $2.6 million lower than the previous quarter's $36.7 million in net bunker costs, with $26.7 million in bunker purchases.

In comparison with the corresponding quarter in 2015, where net bunker costs of $59.5 million were reported, including bunker purchases of $26.4 million, the Q4 2016 figure was $25.4 million, or 42.7 percent, lower.

Total net bunker costs in 2016 were $141.5 million, which included $97.1 million in bunker purchases.

On the issue of risk, Odfjell says bunker clauses in contracts of affreightment (COAs) cover around 60 percent of its exposure. The company added that 6 percent of its exposure in 2017 is hedged at $224 per tonne.

Financial results

For the full year, Odfjell reported a net result of $100 million compared to the $36 million loss in 2015, and improved full-year earnings before interest, taxes, depreciation, and amortization (EBITDA) of $238 million, up from $190 million in 2015.

Odfjell's fourth-quarter net result was $43 million, which was $27 million higher than the previous quarter and a $61 million improvement on the $18 million loss recorded in the corresponding quarter in 2015.

EBITDA during the fourth quarter was $48 million - a drop of $12 million compared to the previous quarter and $3 million lower than in Q4 2015.

"Our markets remained challenging, but Odfjell continues to build both financial and operational strength," said Kristian Morch, CEO of Odfjell SE.