Stolt Tankers reports $2.5m loss in Q1 2009
Chemical tanker specialist Stolt Tankers reported an operating loss of $2.5 million (Dh9m) for the first quarter this year versus operating profit of $27.5m for the previous quarter.
Its Oslo-listed parent Stolt Nielsen attributed the loss to "lower volumes and a decline in spot market rates. Stolt Nielsen CEO Niels G Stolt-Nielsen said results "reflect the panic in the global credit markets that we saw late last year. As producers, traders and consumers stopped ordering products, global industrial production plunged".
According to him, "destocking of inventories followed and parcel tanker cargo volumes dropped more than 30 per cent on some trade routes".
"Though conditions stabilised somewhat in the latter half of February, we attributed the change to a modest restocking of inventories following two months of near paralysis in the market," said Nielsen.
In terms of strategies to cope with "lower demand", Nielsen said the firm will redeliver ships on time charter and bring forward recycling of ships.
"In all businesses we are deferring or cancelling non-committed or non-essential capital expenditures, including newbuildings, and a full hiring freeze has been imposed," he added.
The market already got wind of Stolt's strategy to cancel newbuilding orders, when earlier last month it cancelled a contract with South Korea's SLS Shipbuilding for a 44,000DWT coated parcel tanker.
The tanker is first in an order for a series of four similar tankers ordered from the yard. Stolt said it cancelled the contract due to "extended delivery delays" by the yard.
A senior SLS official told Tankerworld then that the yard was still going ahead with the construction of up to 13 ships for Stolt.
A spokesman for SLS Shipbuilding, however, confirmed to Tankerworld that it is suing Stolt for the cancellation. A separate company source told Tankerworld the suit would "definitely have some repercussion" on Stolt's portfolio of orders with the yard, adding he was "not sure" how many ordered ships would be constructed and delivered.
Its Oslo-listed parent Stolt Nielsen attributed the loss to "lower volumes and a decline in spot market rates. Stolt Nielsen CEO Niels G Stolt-Nielsen said results "reflect the panic in the global credit markets that we saw late last year. As producers, traders and consumers stopped ordering products, global industrial production plunged".
According to him, "destocking of inventories followed and parcel tanker cargo volumes dropped more than 30 per cent on some trade routes".
"Though conditions stabilised somewhat in the latter half of February, we attributed the change to a modest restocking of inventories following two months of near paralysis in the market," said Nielsen.
In terms of strategies to cope with "lower demand", Nielsen said the firm will redeliver ships on time charter and bring forward recycling of ships.
"In all businesses we are deferring or cancelling non-committed or non-essential capital expenditures, including newbuildings, and a full hiring freeze has been imposed," he added.
The market already got wind of Stolt's strategy to cancel newbuilding orders, when earlier last month it cancelled a contract with South Korea's SLS Shipbuilding for a 44,000DWT coated parcel tanker.
The tanker is first in an order for a series of four similar tankers ordered from the yard. Stolt said it cancelled the contract due to "extended delivery delays" by the yard.
A senior SLS official told Tankerworld then that the yard was still going ahead with the construction of up to 13 ships for Stolt.
A spokesman for SLS Shipbuilding, however, confirmed to Tankerworld that it is suing Stolt for the cancellation. A separate company source told Tankerworld the suit would "definitely have some repercussion" on Stolt's portfolio of orders with the yard, adding he was "not sure" how many ordered ships would be constructed and delivered.