Falling Bunker Surcharge Leads to Stolt Tankers Loss

Stolt-Nielsen CEO Niels G. Stolt-Nielsen said 2013 will be challenging

Stolt-Nielsen Limited has reported its tanker division, Stolt Tankers, made a Q1 operating loss of $2.8 million in the first quarter of 2013, a substantial improvement on the $8.6 million Q1 operating loss it made in the corresponding quarter a year ago.

The loss for the three months ended February 28, 2013 reflected the lower bunker surcharge, and higher trading and owning expenses for the period, it said.

However overall bunker expense was down in the quarter, and the company reported the average price it paid for intermediate fuel oil decreased to $640 per tonne in the first quarter compared to $664 per tonne in the previous quarter.

The division's loss was blamed for the company's poor overall result.

"Stolt-Nielsen Limited's poor first-quarter results were largely attributable to a loss at Stolt Tankers, where overall market conditions remain weak," said CEO Niels G. Stolt-Nielsen.

"Higher trading and operating expenses further depressed tanker earnings this quarter."

Overall, net profit attributable to shareholders fell to $1.5 million on revenues of $519.4 million for the quarter, compared with profits of $18.2 million and revenues of $510.0 million in the last quarter of 2012.

Under pressure from high bunker costs, last year Stolt Tankers ordered five fuel-efficient tankers scheduled for delivery starting in December 2015.

Looking into the rest of the year, Stolt-Nielsen said conditions remain challenging for the tanker division.

"Any substantial improvement in Stolt-Nielsen Limited's performance is dependent upon a turnaround in the parcel tanker market, which, in turn, depends in part on the strength of the global economy," he said.

"As stated earlier, we expect 2013 to be a challenging year for Stolt Tankers."