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Low bunker price boosts Stolt-Nielsen in Q1

The low bunker price came as good news for Norway's Stolt-Nielsen in the 1st quarter 2015. But a significant improvement in the chemical market is still far away, says CEO Niels G. Stolt-Nielsen.

Norwegian tanker and chemical carrier Stolt-Nielsen noted improvements in the 1st quarter of the year, where the low fuel prices were the key contributor, says the carrier the carrier in an interim report for the quarter ending on February 28 2015. Stolt-Nielsen delivered a net result of USD 38.7 million from a revenue of USD 487.7 million, compared to a net result of USD 18.6 million in the same quarter 2014 and USD 13.1 million in the 4th quarter 2014.

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"The improvement this quarter derives primarily from lower bunker costs in Stolt Tankers, but also from initiatives taken to lower overall costs in the group," says CEO Niels G. Stolt-Nielsen.

"At Stolt Tankers, the net impact of lower bunker prices improved results, though utilisation and freight rates were down."

Stolt-Nielsen worried about the tanker market

The company's tanker activities, Stolt Tankers, achieved an operating profit of USD 19 million, an improvement compared to the 4th quarter. Stolt-Nielsen's container activities made a USD 16 million operating profit, compared to USD 19.5 million in the 4th quarter 2014, a development the company attributes to a natural seasonal low in the 1st quarter. The terminal division delivered a slightly improved operating result, of USD 15.6 million compared to USD 14 million in the 4th quarter, according to the report.

Even though Stolt-Nielsen also expects to benefit from the low bunker price in the 2nd quarter of the year, the conditions on the chemical market remain poor, stresses Niels G. Stolt-Nielsen:

"(...) cargo volumes must increase if we are to see any material improvement in the chemical tanker market. We have yet to see any sustained increases to date and, unfortunately, there are no indications of any improvement in the near future."

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When Stolt-Nielsen published its annual report for 2014, an overall disappointing year for the carrier, analyst agency Platou was far from as skeptical as the carrier itself was.

"We expect significantly higher 1Q15 results for Stolt Tankers as the ships starts consuming the lower priced bunkers. Management’s comments were predictably bearish; focusing on the orderbook which they claim is 30 percent of the current fleet. This is in our view wrong, as they define the current fleet too narrowly – on our numbers the orderbook is 16 percent which is manageable," said Platou.

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