Odfjell Quarterly October 2012

landmarksODFJELL QUARTERLY magazineOdfjell orders four newbuildings with optionsBy Tore Jakobsen, SVP Corporate Investments, BergenFollowing extensive technical and commercialnegotiations, four shipbuilding contractswere signed between Odfjell ChemicalTankers AS and Hyundai Mipo Dockyard(HMD) in Ulsan, Korea on 31 July.The contract price is below USD 40 millionper unit, and we have also signed an optionagreement for 2+2 contracts at the same pricelevels, to be declared within four and threemonths respectively. Delivery of the first fournewbuildings will be January, March, May andJuly 2014.The newbuildings will replace the P&F and KSECclass which is gradually being phased outby recycling. The specification, with eco-friendlydesign, has been made to what we call ‘OdfjellStandard’, including less fuel consumption inthe range of 10-12% compared to other chemicaltankers of the same size delivered the last fouryears.Continued weak resultsBy Margrethe Gudbrandsen, Communication Manager, BergenThe Hyundai Mipo Dockyard (HMD) in Ulsan, KoreaFrom the signing ceremony. Representatives of HMD management, headed by Senior Vice President T.D.Lee, R.S.Platou Shipbrokers,Petter Arentz and the Odfjell team, Senior Vice President Tore Jakobsen, Vice President Geir Almestad and Senior Project manager ArntKaare Simonsen Meyer.The main dimensions and particulars of the vessels shall be:Length overallmax 182.7 mBreath, moulded32.2 mDesign draught12.5 mDeadweight, design draught46,310 MTCargo capacity (100%)min 54,000 m3No of cargo tanks 20 +2Tank coating25 % zinc / 75 % epoxyNR.03/ 129A second quarter 2012 EBITDA of USD 27million reflects primarily a soft chemicaltanker market. The overall tank terminalearnings remained steady during theperiod, despite increasing challenges andcosts at Odfjell Terminals (Rotterdam).Subsequent to this period of reporting, thisterminal carried out a safety shut-down ofoperations.For the chemical tankers business, secondquarter of 2012 showed a weaker performancewith reduced demand and softer freight rates.The time charter result ended down 15%compared to first quarter of this year.The global economic outlook remains weak,as the uncertainty surrounding the Europeandebt crisis continues and the macroeconomicpicture in China appears to be deteriorating.A moderate recovery of activity, particularlyin the spot market, may stimulate some rateimprovements, similar to those seen in fourthquarter 2011 and first quarter 2012.We expect the situation at OTR to negativelyimpact the results of our tank terminal activitiesfor the remainder of the year.odfjell quarterly magazine