Odfjell Points to Higher Bunker Prices for Weaker 2016 Q4 Results

Thursday February 16, 2017

Odfjell SE (Odfjell) says that weaker financial results recorded for 2016's Q4 compared to 2016's Q3 are largely attributable to increased voyage expenses linked to higher bunker prices, as well as a decrease in contract nominations.

The company says the average bunker prices paid during Q4 were $310 per tonne, up from $275 per tonne in Q3.

In spite of challenging markets, Odfjell says it saw significant improvement in its financial performance for the 2016 year, reporting a net result of $100 million, compared to -$36 million in 2015.

Odfjell reports a result of $43 million for 2016's Q4, including a $44 million gain from the sale of its Oman terminal, impairments of $16 million, as well as other financial gains of $16 million.

"Our markets remained challenging, but Odfjell continues to build both financial and operational strength. Based on our strengthened position we are now launching our new strategy – the 'Odfjell Compass' which will be leading the company into the future," said Kristian Mørch, CEO of Odfjell.

Odfjell Compass is said to be intended to guide the company's business choices going forward and sets out a target of an operated fleet of about 100 vessels.

"There has been a slight improvement in spot chemical freight rates recently and contract nominations returned to normal. We expect that the 1Q17 timecharter results will be in line with or marginally better than in 4Q16," said the company.

Last year, Ship & Bunker reported that Odfjell had suffered a loss of $64.3 million on bunker hedging contracts in 2015, which dragged down its full year result to a loss of $36 million.