Stolt Sea Farm in Quilmas. (Photo: Stock File)
Stolt Sea Farm enjoys higher profit thanks to increased turbot prices
Thursday, July 04, 2013, 03:10 (GMT + 9)
Stolt Sea Farm (SSF) had an operating profit of USD 7.4 million in Q2 compared with an operating loss of USD 0.1 million in the first quarter of this year thanks to higher turbot prices, which brought a positive impact of USD 6.5 million from the accounting for inventories at fair value.
The company produces and markets high-quality turbot, sole, sturgeon, and caviar.
Second-quarter operating revenues hit USD 15.1 million, up from USD 13.4 million in the first quarter, partly due to both higher market prices for turbot and a higher volume of turbot sold compared with Q1.
Even though demand in SSF’s key markets remained weak, a sharp drop in production by a competitor led to lower supplies of turbot. Sole prices moved up in the second quarter, though the volume sold was flat, and sales of caviar and sturgeon fell as expected for the season.
“Stolt Sea Farm had a good quarter, with turbot prices rising as market supplies tightened,” Niels G Stolt-Nielsen, CEO of Stolt-Nielsen Limited, said. “We expect Stolt Sea Farm to continue to benefit from a price recovery for both turbot and sole going forward.”
The executive noted that the global economy remains turbulent and the outlook uncertain, such that Stolt Nielsen group questions how the US economy might grow and is concerned that Europe and China may not bounce back anytime soon. The company expects recovery to take time.
Stolt-Nielsen Limited has achieved modest gains in its contracts of affreightment, but does not yet see any acceleration of momentum in the market, which is still overflowing with excess tonnage and low volumes. The company continues to add storage capacity, which will have a positive impact on the results going forward, he stated, and Stolt Tank Containers expects a higher margin pressure due to more competition.
Niels Stolt-Nielsen also commented that Stolt Tankers’ results for Q2 reflect the moderate rate increases achieved in the firm’s contract portfolio over the last 12 months, even though the spot rates have moved in the opposite direction. Further, volumes have been challenging.
- Stolt-Nielsen Ltd reports higher net profit, lower revenues
By Natalia Real