Weak Chemical Tanker Market Impacts Odfjell`s 3Q Results
EBITDA of USD 8 million reflects a continued weak chemical tanker market and significant restructuring costs at Odfjell Terminals (Rotterdam) (OTR). The time charter results are basically unchanged as compared to the previous quarter. Our tank terminal earnings exclusive of OTR are stable.
The chemical tanker market remained unchanged during third quarter of 2012. Despite some encouraging developments in specific trades, we continue to face increased competition in selected segments from the product tanker fleet. Results are cushioned by reduction in bunker prices.
Our tank terminals, exclusive of OTR, delivered stable EBITDA results in third quarter compared to the previous quarter. Construction in Charleston, USA, and in Tianjin, China, is progressing according to schedule.
Following our decision to temporarily shut down the terminal in Rotterdam, the re-commissioning project is on schedule. Around 576 000 CBM of the total capacity has been reapproved for usage and we expect that 1.2 million CBM will be operational during first quarter of 2013. At the same time, significant restructuring and efficiency initiatives are under way.
In October we secured a USD 200 million credit facility for our North-American tank terminal expansions and a USD 38 million credit facility for financing of the two LPG/Ethylene carriers delivered in the third quarter.
The difficult fiscal situation in Europe and in the US, and slower growth in China, are negatively impacting trade and thus, delay the upturn for the chemical tankers.
We expect to deliver stable results from the tank terminal division; however, the situation at OTR will continue to negatively impact the results of our tank terminal activities for the coming quarters. Based on a successful implementation of our recovery plan, we expect OTR to deliver improved results in 2013.
Nevertheless, despite some improvements going forward, we still expect to deliver negative results also in the fourth quarter.
Source: Odfjell
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