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Stolt-Nielsen: Decent results due to a diverse business portfolio

Posted on October 10, 2023

Stolt-Nielsen posted its 3Q (June-August) report this morning with results broadly close to our projections. Tankers, Terminals and Sea Farm have all brought solid results, with only Containers underperforming due to lower revenues and margins. All in all, SNI delivered another satisfactory report with a positive outlook moving into 2024.

3Q slightly better than our expectations

3QrRevenues came in only slightly below our estimate of USD 700m, but the bottom line of USD 90m beat our projections. Stolt Tankers had another strong quarter, benefitting from firm contract freight rates and improved volumes overall, and the spot market has now stabilised. Stolthaven Terminals continues to enjoy high utilisation, which has allowed for renewed contracts at increased rates. Tank Containers managed to increase shipment volumes, though at lower margins and Sea Farm benefited from seasonally strong demand in the summer months with prices reaching new record highs.

Slight guidance changes, but a positive mid-term outlook remains

While the chemical industry experienced declines in output during late 2022-1H23, the company expects this negative trend to reverse as the global chemical industry is expected to slowly grow again. For Tankers, SNI remains positive looking into 2024 that upcoming renewals will be made at strong rates and that the outlook for product tankers is improving. Stolthaven Terminals is seeing an easing of the tightness in global storage markets and anticipates relatively stable earnings for the last quarter of the year. While the aforementioned margin compression for the Tank Container segment is easing, 4Q23 results should be slightly weaker. Stolt Sea Farm is in a very good position to continue to balance volume and price with focus now to build up biomass ahead of the peak Christmas season.

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