Odfjell has reported a “challenging” 2018 as the chemical tanker markets were at their lowest point in 15 years. The company posted an “unsatisfactory” net loss of $211 million.

“Towards the end of the year we saw signs of improving markets, and we believe that 2018 was indeed a turning point. We are approaching 2019 and the future with optimism – Odfjell represents a strong and efficient operational platform in an industry that has strong fundamentals,” commented Kristian Mørch, Odfjell CEO.

Meanwhile, the company made significant changes and improvements in its terminal portfolio and setup; the sale of its Rotterdam terminal, increased ownership in Antwerp, and a new partner in the U.S. “Despite the impairments related to Rotterdam, these changes have had an immediate and positive impact on our financial performance and cash flow that will allow us to strengthen our position in markets with very attractive fundamentals,” noted Mørch.

Odfjell SE has ownership in seven operational tank terminals: two terminals in the US, one in Antwerp, one in South Korea, and three in China. Odfjell Terminals also has a cooperation agreement with 13 tank terminals in South America. These tank terminals are partly owned by related parties.

The company is experiencing a steady increase in demand for cargo consolidation, as a result of the industry’s ongoing pursuit of efficiency improvements along the entire supply chain. Its tank terminals offer cargo consolidation programmes designed to reduce time and fuel consumption in port for its ships. “In combination with its shipping business, Odfjell Terminals makes Odfjell one of the world leaders in the transportation and storage of bulk liquids,” said Mørch.

In 2018, following the announcement in May that Lindsay Goldberg (LG) was considering a sale of its 49 percent shareholding in Odfjell Terminals BV (OTBV), Odfjell SE decided to tag along on an outright sale of Odfjell Terminals Rotterdam (OTR). This transaction was closed in 3Q18.

A reorganisation of Odfjell Terminals was conducted and concluded in 4Q18 and included Odfjell SE acquiring LG’s 12.25 percent indirect shareholding in the Noord Natie Odfjell Terminals (NNOT) in Antwerp, increasing Odfjell’s ownership share in the terminal to 25 percent. 

Odfjell Terminals Houston (OTH) faced strong storage demand in 2018 and delivered a solid financial performance for the year. Odfjell Terminals Charleston (OTC) was 100 percent full for most of the year and recorded a year-on-year improvement in revenues and bottom line. Projects in the U.S. remain under evaluation, and the outlook is positive moving forward.

In Asia, both Odfjell Terminals Dalian (OTD) in China and Odfjell Terminals Korea (OTK) in Ulsan recorded another solid year. In China, Odfjell Terminals remains in a good position to take part in the growth in LNG imports.

Odfjell’s joint venture in China with Tianjin Economic-Technological Development Area – Odfjell Nangang Terminals Tianjin (ONTT) – recorded improved results in 2018, but the full potential continues to lag. 

Noord Natie Odfjell Terminals in Antwerp posted a year-on-year increase in financial performance, mainly due to an additional 33,560 cbm of stainless steel storage capacity that came into commercial operations in the second half of 2018. 

Early 2019, LG agreed to sell its 49 percent shareholding in Odfjell Terminals US (OTH and OTC) to funds managed by Northleaf Capital Partners. The sale is expected to conclude in the first half of 2019, and we are then positioned to develop our US terminal portfolio further. LG’s process to exit its shareholding in the Asia terminals is still ongoing.

The company recorded gross revenues of $91 million in 2018, down from $111 million in 2017. EBITDA was $24 million, down from $38 million.

For more information visit www.odfjell.com

26th March 2019