Stolt Tankers, a division of Stolt-Nielsen Limited (Stolt-Nielsen) has reported an operating profit of $20.4 million for the first half of 2012 and $29.0 million for the quarter ended May 31, 2012 according to its latest unaudited results, Ship & Bunker reports.
The company said bunker expenses had increased $38.9 million in the first six months of 2012 compared to the same period in 2011, and the average price for residual fuel bunkers during the half was approximately $714 per metric tonne (pmt) compared with $569 pmt in 2011.
The higher bunker fuel prices also meant bunker-surcharge billings for the half increased by $17.3 million.
Compared to the same period in 2011, spot rates were approximately 12.7% higher during the first half of 2012 but the gains were offset by higher bunker prices, as well as higher port, barging, and transhipment costs.
Rates earned under Contracts of Affreightment (COA) were up by 1.3%.
The company said where possible it managed the impact of bunker price changes through bunker fuel escalation clauses with customers or through its bunker hedging programme.
For the six months to May 31, 2012, 91% of revenue earned under COA, which represents 73% of total volume, included provisions for bunker fuel escalation clauses.
Stolt-Nielsen said its policy is to hedge a minimum of 50% of expected bunker purchases within the next 12 months through either bunker surcharges included in the COA or hedging actions.
In the previous quarter ending February 2012 Stolt Tankers reported an operating loss of $8.6 million.
As a group, Stolt-Nielsen reported a net profit of $45.5 million for the first half of 2012 and $36.6 million for the quarter ended May 31.
The company said operating profits of $41.4 million for its storage division, Stolthaven Terminals, up from $32.2 million were driven by the new terminal facilities in Australia, New Zealand, Singapore and the Netherlands.
Commenting on the results, Niels G. Stolt-Nielsen, Chief Executive Officer of Stolt-Nielsen said, "Stolt-Nielsen Limited's performance strengthened slightly in the second-quarter."
"Excluding the insurance gain on Stolt Valor, the improvement was attributable primarily to better operating results at Stolt Tankers, driven by improved COA freight rates and higher utilisation in terms of tons carried per day," he added.
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