Stolt-Nielsen Limited reported unaudited results for the first quarter ended February 28, 2017. Net profit attributable to shareholders in the first quarter was $15.2 million, with revenue of $475.7 million, compared with a net profit of $22.8 million, with revenue of $463.0 million, in the fourth quarter of 2016.

Highlights for the first quarter of 2017, compared with the fourth quarter of 2016, were:

Stolt Tankers reported an operating profit of $28.5 million, down from $30.4 million, reflecting continued softness in the chemical tanker market, higher bunker fuel costs and a loss on a ship sold for early recycling, partially offset by the positive impact from the JO Tankers acquisition.

– The Stolt Tankers Joint Service Sailed-in Time-Charter Index was 0.68, down from 0.72.

– Stolthaven Terminals reported an operating profit of $16.7 million, up from $14.0 million, mainly reflecting improved results at Stolthaven Houston, Stolthaven Singapore and increased income from joint ventures. The prior quarter included gains of $2.3 million related to changes in the Company’s defined benefit pension and retiree healthcare plans.

– Stolt Tank Containers reported an operating profit of $9.0 million, down from $15.1 million, reflecting seasonally lower revenue, continued price competition and higher depreciation. The prior quarter included gains of $1.4 million related to changes in the Company’s defined benefit pension and retiree healthcare plans.

– Stolt Sea Farm’s operating profit before the fair value adjustment of inventories was $2.2 million, compared with $2.1 million. Strong wild catches in the quarter drove supply up and prices down. The fair value adjustment had a negative impact of $3.5 million, compared with a positive impact of $0.6 million in the previous quarter.

– Corporate and Other reported an operating loss of $4.6 million, compared with a loss of $10.0 million, with the latter figure reflecting $2.2 million in costs related to the acquisition of JO Tankers and a $2.7 million impairment for doubtful accounts receivable at Stolt Bitumen Services.

Commenting on the Company’s results, Mr. Niels G. Stolt-Nielsen, Chief Executive Officer of Stolt-Nielsen Limited, said: “The downward slide in the chemical tanker market that we observed in the second half of last year continued during the first quarter. Newbuilding deliveries drove down spot rates, while rising bunker prices ate into margins. Looking ahead, the chemical tanker orderbook is shrinking and we are seeing at least some evidence that the market is now bottoming out. The rest of this year will still be a challenge, but we anticipate an improvement in the chemical tanker market once 2017 is behind us.

The integration of JO Tankers into Stolt Tankers is 2 proceeding well. Stolthaven’s first-quarter results were in line with our expectations, as we continue the long-term improvements we are making in this business. Stolt Tank Containers’ topline performance was down, consistent with seasonal patterns, while operating income reflected the continued impact of price competition, though we believe we are near the bottom. At Stolt Sea Farm, the wild catch rose in the first quarter, increasing supply, pushing market prices down and, as a result, driving up both inventories and fair value losses at SSF during the normally strong holiday sales season.”

On February 8, the Company announced that the Board of Directors of Stolt-Nielsen Limited recommended a final dividend for 2016 of $0.50 per Common Share, payable on May 11, 2017 to shareholders of record as of April 27, 2017. The dividend, which is subject to shareholder approval, will be voted on at the Company’s Annual General Meeting of Shareholders scheduled for April 20, 2017 in Bermuda.

Debt, net of cash and cash equivalents, as of February 28, 2017 was $2,368.3 million, compared with $2,260.4 million as of November 30, 2016. The increase in net debt was mainly due to the delivery of two C-38 newbuildings from Hudong-Zhonghua Shipbuilding in Shanghai and the associated debt drawdowns. Equity attributable to shareholders of SNL as of February 28, 2017 was $1,415.3 million, compared with $1,380.0 million as of November 30, 2016.

The Company’s fourth-quarter results included a one-time gain of $3.5 million, as a portion of U.S. retirees chose to opt-out of the Company’s defined benefit pension plans by receiving a onetime cash payment, thus reducing the Company’s long-term liability. Results also reflected a $2.1 million one-time gain due to a reduction in 2016 post-retirement medical plan accruals, stemming from changes to retiree contributions, deductibles, out-of-pocket maximums and co-payments. Net interest expense in the first quarter was $31.7 million, up from $26.6 million in the fourth quarter. SNL had $108.3 million of cash and $268.0 million of available and undrawn committed overdraft facilities as of February 28, 2017.

Stolt Tankers

Stolt Tankers reported first-quarter operating revenue of $283.4 million, up from $259.6 million, in the fourth quarter. Revenue growth for the quarter reflected a 17.3% increase in total volume carried, due mostly to the additional ships operating in the fleet, following the acquisition of JO Tankers in the fourth quarter of 2016. The positive impact of the increase in volume was held down by a 8.9% decrease in spot rates and a 3.6% decrease in COA rates, excluding the impact of the JO Tankers acquisition, driven by the substantial number of newbuilding deliveries to the global chemical tanker fleet, starting in the second half of 2016 and continuing in 2017.

Stolt Tankers reported a first-quarter operating profit of $28.5 million, down from $30.4 million in the fourth quarter. Excluding a $6.1 million positive impact from ships acquired in the JO Tankers transaction, Stolt Tankers’ results primarily reflected the impact of lower spot rates, combined with a 17.2% increase in the average price of intermediate fuel oil/low sulfur fuel consumed in the first quarter, to $306 per ton, up from to $261 per ton in the fourth quarter. Earnings for the quarter were also held down by a $1.0 million decrease in income from joint ventures due to the weaker market conditions. Further, income was negatively impacted by extended winter fog delays in Houston, the effect of three drydockings during the quarter, and a $2.1 million loss on sale of Stolt Hill for early recycling. Stolt Tankers took delivery of two newbuildings from Hudong-Zhonghua Shipbuilding in Shanghai during the quarter, the Stolt Sincerity and Stolt Integrity.

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Source: Stolt-Nielsen