Lower TCEs hit Odfjell

(Feb 12 2010) Parcel tanker and terminal operator Odfjell’s fourth quarter and full year results were badly affected by a large compensation payment.

The company announced a pre-tax net 4Q09 result of $14 mill, compared with $62 mill for the same period last year. For the whole year, Odfjell said that the net pre-tax result was $26 mill, compared with $146 mill reported in 2008.

Odfjell’s 2009 figure included a compensation payment of $43 mill and impairment charges of $14 mill, while the 2008 result included capital gains of $53 mill.
Last year’s EBITDA came in at $182 mill, compared with $286 mill in 2008. EBIT, which included the compensation and impairment charges, was $61 mill, compared to $198 mill the previous year.

As for the parcel tanker business, EBITDA for 2009 was $73 mill, compared with $191 mill the year before. However, EBIT was a negative $6 mill, compared with a positive $129 mill in 2008.
The timecharter equivalent earnings (TCEs) were 19% down last year on the 2008 figures, while the 4Q09 TCEs were 7% lower than those seen in the 3Q09.

It was also announced that long serving chairman Bernt Daniel Odfjell would be stepping down in favour of his son Lawrence Ward Odfjell, who is currently president of Odfjell Terminals, at May’s annual general meeting.

As for the future, Odfjell reported that this year started on a slightly more positive note, especially for clean petroleum products, acids and basic chemical export from the MEG.
Disposal of older vessels should give the company better asset utilisation, thus enhancing the results for the rest of the fleet.

Overall fleet net supply will increase this year due to an influx of newbuildings. However, new orders have significantly diminished.

Vessel recycling will likely accelerate and Odfjell said that some newbuildings could be delayed, or even cancelled.

Although 2010 will see a challenging market, the company believed that the 4Q09 represented the bottom of the cycle.

Source: tanker Operator