Mon 2 Feb 2009, 09:37 GMT

Stolt-Nielsen hit by drop in bunker surcharges


Company says $33.1m decrease in revenue is partly due to steep decline in surcharges.



Norwegian shipping group Stolt-Nielsen S.A. has said the $33.1 million decline in revenue it experienced during the fourth quarter of 2008 was partly due to a steep decline in bunker surcharges.

The company saw revenue during the last three months of last year drop to $489.5 million, from $522.6 million, which it said reflected a sharp drop in bunker surcharges, softening market conditions and the impact of hurricanes in the U.S. Gulf.

Meanwhile, net profit attributable to shareholders was $52.6 million, up from $42.3 million, reflecting a net benefit from the reversal of prior year tax provisions of $9.5 million in the fourth quarter, the company said.

Stolt Tankers and Stolthaven Terminals reported a decrease in operating profit, due primarily to the combined impact of the weakening business conditions and the effects of the hurricanes in the U.S. Gulf.

Stolt Tank Containers results reflected improved margins and continued strength in overall demand, though shipment volumes began to decline sharply late in the quarter.

Commenting on the Company's results, Niels G. Stolt-Nielsen, Chief Executive Officer said: "While SNSA's performance in 2008 reflected four consecutive quarters of good results, the effects of softening demand and the steep decline in global economic activity have now begun to have a tangible impact on our operations. Business conditions continued to deteriorate in December, which strongly suggests that SNSA's relatively favorable fourth-quarter results should not serve as an indication of our near-term performance."

"Given the current global economic environment, we see little cause for optimism. We became concerned about the outlook well over a year ago and as a result took a number of actions, including securing financing of our newbuildings, the accelerated recycling of five ships, and the sale of one ship. We expect 2009 and 2010 to be extremely challenging years in our industry, and we are planning accordingly. Considering these and other factors, I believe SNSA, with its experienced team and strong position in each of its markets, is well prepared to manage through this crisis."

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