Introduction & Market Context
Odfjell SE (ODF) reported its first quarter 2025 results on May 8, showing resilience despite facing significant market uncertainty driven primarily by U.S. trade tariffs. The Norwegian chemical tanker operator delivered a net result of USD 34.4 million, down from USD 50.5 million in the previous quarter, as spot rates continued their downward trend while still maintaining historically elevated levels.
The company’s performance reflects broader market dynamics in the chemical shipping sector, where geopolitical tensions and trade policy shifts are creating headwinds despite fundamentally strong demand. Odfjell’s stock closed at 97.7 on May 7, 2025, showing a 2.69% decrease ahead of the earnings announcement.
Quarterly Performance Highlights
Odfjell reported time charter earnings of USD 167.7 million for Q1 2025, representing a decrease from USD 183.1 million in the previous quarter. The company achieved a daily TCE rate of USD 29,556, comfortably above its cash break-even level of USD 23,996, maintaining healthy operating margins despite market pressures.
As shown in the following quarterly highlights slide, the company delivered an EBIT of USD 54.4 million and a net result of USD 34.4 million:
Operating expenses increased slightly by USD 0.8 million to USD 53.2 million, while general and administrative expenses rose by USD 0.8 million to USD 21.3 million compared to the previous quarter. The company’s terminals business contributed USD 2.9 million to the results, showing improvement from the USD 2.2 million in Q4 2024.
A notable operational achievement was Odfjell’s record low carbon intensity (AER) of 7.0, demonstrating the company’s commitment to sustainability. This was highlighted by the Bow Olympus vessel, which completed a first-of-its-kind near carbon-neutral transatlantic voyage using a combination of wind-assisted propulsion and 100% biofuel.
The following chart illustrates Odfjell’s impressive progress in reducing carbon intensity over time:
Detailed Financial Analysis
Odfjell’s income statement reveals the impact of lower spot freight rates and fewer commercial revenue days due to vessel sales and off-hire vessels. The company recorded an EBITDA of USD 93.1 million, down from USD 110.5 million in Q4 2024.
The detailed breakdown of financial performance is shown in the following income statement:
The company’s balance sheet remains solid, with total assets of USD 2,076.9 million and total equity of USD 906.8 million as of Q1 2025. Cash and cash equivalents decreased to USD 86.3 million from USD 146.5 million in the previous quarter, primarily due to debt repayment and dividend distribution.
Free cash flow remained strong at USD 69 million for the quarter, though operating cash flow decreased to USD 60.4 million from USD 89.5 million in Q4 2024. This decline was driven by lower TCE and an increase in working capital.
The following chart illustrates the company’s free cash flow trends:
Odfjell actively managed its debt profile during the quarter, financing four vessels under a new USD 242 million bank facility and successfully repaying its last outstanding bond in January 2025. Nominal interest-bearing debt amounted to USD 738 million at quarter-end.
Strategic Initiatives
Fleet renewal remained a key strategic focus for Odfjell during Q1 2025. The company sold two vessels, Bow Clipper and Bow Oceanic, while contracting two additional 35,000 dwt stainless steel newbuildings to be built in Japan for delivery in 2027 and 2028.
As of Q1 2025, Odfjell has 18 newbuildings on long-term time charters scheduled for delivery from Q4 2025 through 2028. These vessels, together with other newbuildings, account for 14% of the current orderbook in the company’s core segment, positioning Odfjell well for future growth.
The company’s terminal business performed strongly with an average commercial occupancy rate of 95.8% and an EBITDA of USD 8.4 million for the quarter. Throughput volumes at the terminals have increased in recent months, contributing to the improved performance.
Odfjell renewed approximately 18% of expected annual Contract of Affreightment (COA) volumes during the quarter, with total volumes rising slightly to 3.2 million metric tonnes, primarily driven by an increase in COA volumes.
Forward-Looking Statements
Looking ahead, Odfjell expects its Q2 2025 financial results to be in line with, or slightly better than, Q1 2025. The company anticipates that swing tonnage will remain at low levels, which should support chemical tanker rates.
However, market uncertainty has increased due to U.S. tariffs, clouding the overall outlook. The International Monetary Fund downgraded global GDP growth in 2025 by 0.8% to 2.8% in its April forecast. Despite these headwinds, global seaborne chemical trade is estimated to increase by around 2% in 2025.
The company’s presentation concluded with this concise summary of current performance and near-term outlook:
Odfjell’s orderbook analysis suggests that while the industry orderbook continues to grow, it remains at a sustainable level. An aging global fleet with approximately 18% of vessels over 20 years old should keep net fleet growth at manageable levels in the coming years, potentially supporting freight rates.
The company remains focused on operational efficiency, fleet renewal, and sustainability initiatives as it navigates the uncertain market environment characterized by geopolitical tensions and evolving trade policies.
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.