0OHK Stolt-nielsen Ltd

 
TIDMSNI 
 
 
   LONDON, April 16, 2020 -- Stolt-Nielsen Limited (Oslo Børs: SNI) 
today reported unaudited results for the first quarter ended February 
29, 2020. The Company reported a first-quarter net loss attributable to 
shareholders of $20.0 million, with revenue of $498.8 million, compared 
with a net profit attributable to shareholders of $5.9 million, with 
revenue of $497.5 million, in the fourth quarter of 2019. 
 
   Under International Financial Reporting Standards (IFRS), the 
coronavirus (COVID-19) pandemic is an event that triggers an impairment 
review of the Company's balance sheet.  However, the Company has been 
unable to quantify possible impairments of long-term assets, due to the 
difficulties in determining how the COVID-19 pandemic will evolve and 
the effects it may have, both on the value of the Company's assets and 
on the Company's ability to continue as a going concern. 
 
   At the end of the first quarter the Company had $519 million in 
available liquidity. 
 
   Highlights for the first quarter of 2020, compared with the fourth 
quarter of 2019, were: 
 
 
   -- Stolt Tankers reported an operating profit of $4.7 million, down from 
      $14.6 million, mainly reflecting increased costs related to the 
      transition to low sulphur fuel mandated by IMO 2020, as well as 
      scheduling issues arising from drydocking delays and the Stolt Groenland 
      incident. 
 
   -- The Stolt Tankers Joint Service Sailed-in Time-Charter Index was 0.50, 
      down from 0.54, reflecting higher bunker costs. 
 
   -- Stolthaven Terminals reported an operating profit of $18.9 million, up 
      from $11.7 million, as the prior quarter included an impairment of $5.5 
      million. 
 
   -- Stolt Tank Containers reported an operating profit of $6.7 million, down 
      from $15.7 million, due to lower demurrage and ancillary revenue, along 
      with higher ocean-freight costs not fully passed through to customers. 
 
   -- Stolt Sea Farm reported an operating loss of $9.8 million, down from an 
      operating profit of $1.7 million in the fourth quarter, reflecting a 
      $12.0 million impairment of biomass value, due to a steep drop in market 
      demand caused by the COVID-19 pandemic. 
 
   -- Corporate and Other reported an operating loss of $2.6 million, compared 
      with a profit of $4.2 million in the fourth quarter, mostly reflecting a 
      profit sharing adjustment recorded in the fourth quarter. 
 
 
   Commenting on the Company's results and outlook, Niels G. Stolt-Nielsen, 
Chief Executive Officer of Stolt-Nielsen Limited, said: "While the 
effects of the COVID-19 pandemic have substantially altered our outlook 
for 2020, Stolt-Nielsen Limited's first-quarter results were only 
slightly impacted. The underlying recovery of chemical tanker markets 
that started in 2019 continued in the first quarter, with both higher 
spot rates and contracts renewed at an average increase of 4.74%. 
However, Stolt Tankers' first-quarter results were negatively impacted 
by higher bunker costs resulting from the switchover to low-sulphur fuel, 
and delays due to scheduling issues arising from delays in drydocking 
associated with scrubber and waste water treatment installations. At 
Stolt Tank Containers, higher shipments and improved utilisation drove 
an increase in transportation revenue. However, this was more than 
offset by higher move-related costs due to the IMO 2020 low-sulphur fuel 
charges imposed by carriers and increased repositioning costs from the 
build-up of tank containers in China as a result of the extended Chinese 
New Year due to Covid-19. Stolthaven Terminals' operational results were 
in line with expectations, as markets remained stable. Stolt Sea Farm, 
in contrast, was quickly impacted by the pandemic, due to widespread 
shutdowns of restaurants and hotels in SSF's main markets in Spain and 
Italy, resulting in a significant write-off of biomass inventory value. 
 
   "As the pandemic has escalated in the six weeks since the end of our 
first quarter on February 29, the impact on our businesses--excluding 
SSF--has so far remained relatively modest. At Stolt Tankers, contract 
volumes remain relatively healthy and contract renewals continue with 
improved terms, though we are experiencing some port delays. Spot 
volumes in most markets, so far, have also been holding up. Stolthaven 
Terminals has seen an increase in enquiries for storage in most of its 
terminals, so utilisation is up, but throughput is slightly down. Stolt 
Tank Containers continues to see a robust market, reporting a record 
number of shipments in March and utilisation of 71%, the highest we have 
seen in recent years, while we are also seeing increased inquiries by 
customers to use containers as storage. However, we continue to have 
significant repositioning costs as a result of the rapidly changing 
trade flows. 
 
   "That said, I believe it is just a matter of time before we see a 
significant slowdown. Most economic analysts are now forecasting an 
imminent and deep global recession, which is likely to be accompanied by 
substantial reductions in manufacturing worldwide. 
 
   "The severity and duration of the expected recession are, obviously, 
impossible to predict. So, while we are hoping for the best, we are 
preparing for the worst. Actions include extensive measures to conserve 
cash and to reduce costs, while delaying or eliminating capital 
expenditures and projects across the full spectrum of our businesses. We 
have so far managed to find approximately $83 million of savings from 
capital expenditures and operating and administrative and general 
expenses, including that the Board of Directors has agreed to cut board 
fees by 50% and our senior management team has volunteered to take a 
salary cut of 20%, effective April 1. On the revenue side, we are 
diligently working to maintain our strong customer base by renewing 
contracts, while also aggressively pursuing new business and working 
closely with customers to create new solutions to help them adapt in 
this constantly changing environment. 
 
   "On a positive note, the Company had just over half a billion dollars in 
available liquidity at the end of the first quarter following the bond 
issue in early February, which will allow the Company to pay off its 
April bond maturity in cash and help us weather this storm. In addition, 
the Company has five unencumbered terminals that can be used to raise 
further liquidity so that we are in a position to repay the March 2021 
bond should the bond market be closed. 
 
   This information is subject to the disclosure requirements pursuant to 
Section 5-12 the Norwegian Securities Trading Act 
 
   Attachment 
 
 
   -- SNL - 1Q20 Earnings Release 
      https://ml-eu.globenewswire.com/Resource/Download/7fce3011-c276-4e2b-9bb7-4d42bca7d950 
 
 
 
 
 
 
 

(END) Dow Jones Newswires

April 16, 2020 02:30 ET (06:30 GMT)

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