After seven years as CEO of Norwegian company Odfjell, departing Chief Executive Kristian Mørch and the chemical tanker carrier present a profit for the second quarter in a row, confident in ”stronger results” for the chemical tanker market.
For the second quarter in a row, Odfjell presents black bottom-line figures, expecting even ”stronger results” for the chemical tanker carrier in the year’s second quarter with a generally positive view of market developments.
According to Odfjell’s interim report, the carrier landed first-quarter earnings before interest, taxes, depreciations and amortizations (EBITDA) of USD 67.4m, with a net result of USD 11.1m. In comparison, the same quarter last year saw EBITDA at USD 53.2m and a deficit of USD 15.6m.
”The chemical tanker market improved considerably in the second half of the quarter, driven by strong fundamentals and also by the crisis caused by Russia’s invasion of Ukraine,” says Odfjell Chief Executive Kristian Mørch in the statement.
The market ”has tightened further [higher volumes and smaller difference between supply and demand, -ed.] and we expect to report stronger results in the second quarter.”
It won’t be with Mørch as CEO, however.
After seven years of heading Odfjell, based in Bergen, Norway, Mørch resigned from his position in March in order to move with his family back to neighboring Denmark.
May 6, Mørch is replaced by Harald Fotland, who was recruited internally. Fotland has been chief operating officer of the tanker company until this point.
Rival acquires Odfjell shares
Mørch’s resignation as CEO of Odfjell came about a week after the tanker carrier’s major competitor Stolt-Nielsen’s announcement in early March that it had acquired 5% of its rival.
This causes immediate speculation as to a potential consolidation between the two family-dominated carriers. Speculation that Laurence Odfjell, chair of the tanker firm, denied at once.
To WPO, Mørch emphasized at the time that his resignation did not relate to Stolt-Nielsen’s share acquisition in the company.
While Niels G. Stolt-Nielsen, CEO of the Stolt-Nielsen shipping group including Stolt Tankers, said in connection with the group’s quarterly financial statement in March that he still views consolidation as necessary.
”Our investment has naturally prompted speculation about a potential merger between Stolt Tankers and Odfjell Tankers. I have previously spoken out about the need for consolidation in the chemical tanker industry and still strongly believe it is the best way to make our industry environmentally and economically sustainable.”
So far, the two rivals, Stolt Tankers and Odfjell, will continue on separate paths.
In Q1, Odfjell saw TCE revenue of USD 135.6m against USD 120.4m in the same quarter last year. The growing top line is due to rising rates in particular.
While the average TCE rate came to USD 19,676 per day in last year’s Q1, the level was USD 22,368 per day in the first three months of this year. This is also an improvement upon the day rate in Q4 last year of USD 20,868. Odfjell informs that the estimated breakeven rate is USD 21,800 per day.
