Thu 9 Nov 2017, 11:23 GMT

Odfjell posts Q3 loss as bunker costs rise


Company expects Q4 to be 'in line' with Q3 but believes chemical tanker market will improve in 2018.



Shipping company and terminal operator Odfjell reports that the average bunker price paid by its chemical tankers in the third quarter (Q3) was up compared to the previous three-month period.

On average, the Norwegian firm says its chemical tanker fleet paid $334 per tonne in Q3, which was $4, or 1.2 percent, higher sequentially.

Odfjell's net quarterly bunker cost of $383 per tonne (including the effect from bunker adjustment clauses) in Q3 represents an increase of $18, or 4.9 percent, year-on-year (YoY).

In a sequential comparison with Q2, the average price was up $6, or 1.6 percent.

For the first nine months of the year, the average bunker cost was also $383 per tonne - a YoY jump of $30, or 8.5 percent.

Odfjell posted Q3 net bunker costs of $37.8 million, including $34.1 million in bunker purchases - a YoY rise of $1.1 million, or 3.0 percent. In a quarter-on-quarter (QoQ) comparison, the figure was up $0.5 million, or 1.3 percent.

On the issue of risk, Odfjell said bunker clauses in contracts of affreightment (COAs) cover around 64 percent of its marine fuel exposure and that 6 percent of its exposure in 2017 is hedged at $230 per tonne.

Key financial results

In its overall results, Odfjell posted a Q2 net loss of $10.5 million, compared with a net profit of $16.5 million in Q3 2016 and a net loss of $4.7 million in the previous quarter.

For the first nine months, the net loss was $13.7 million, having achieved a net profit of $56.5 million in the prior-year period.

Commenting on the company's performance, Kristian Morch, CEO of Odfjell SE, said: "3Q was a challenging quarter for our tanker and terminal divisions. Our balance sheet remains robust and our competitiveness continues to increase, so we are positioned to benefit once our markets recover. The sale of our Singapore terminal in line with our strategy will result in a significant gain. We expect 4Q 2017 to be in line with 3Q 2017."

Odfjell said: "We believe that chemical tanker markets will gradually improve through 2018 as tonne-mile demand is expected to surpass net fleet growth."

The company added: "We expect storage demand for oil minerals to remain challenging while we expect stable demand and results for chemical storage."

Norway 

MAmmoSS graphic. Mitsubishi Shipbuilding receives order for ammonia fuel handling system  

MAmmoSS system will support shop testing of ammonia marine engines from two licensors.

Neoliner Origin vessel. Kongsberg Maritime to lead EU Horizon project targeting wind-assisted propulsion at scale  

A 15-partner European consortium will use two full-scale vessel demonstrators to validate wind propulsion technology.

Petrobras logo. Petrobras warns of extended MGO and VLSFO supply suspension at Port of Itaqui  

Fuel distributor announces pipeline maintenance shutdowns affecting both MGO and VLSFO supply.

Richard Berkling, PowerCell Group. PowerCell secures SEK 50m marine fuel cell order for two liquid hydrogen cargo ships  

Swedish fuel cell maker wins contract to power two North Sea hydrogen vessels by 2028.

Wärtsilä hydrogen engine. MatH2 consortium launched to tackle hydrogen materials barriers  

New Finnish-led alliance targets materials compatibility challenges holding back hydrogen adoption.

CMA CGM Berenice vessel. CMA CGM takes delivery of fifth methanol dual-fuel boxship in series from Jiangnan Shipyard  

15,000-teu vessel is the penultimate ship in a six-vessel series due for completion in September.

VeriSphere logo. VPS launches VeriSphere Webshop in push to digitise marine fuel services  

Veritas Petroleum Services unveils self-service digital platform giving customers direct access to fuel data tools.

Titus vessel. ExxonMobil and Wallenius Wilhelmsen complete first trial of biofuel blend made from FAME distillation residue  

Vehicle carrier bunkered in Zeebrugge with B30 VLSFO blend.

Chimbusco and Shenergy green methanol agreement signing. 'China’s largest single-order green methanol procurement deal' announced  

Chimbusco and Shenergy seal agreement for 6,000 tonnes of methanol.

Moriond vessel. Exmar takes delivery of third dual-fuel LPG midsize gas carrier in newbuild programme  

Belgian shipping group Exmar takes delivery of the 41,000-cbm LPG carrier Moriond.