Stolt-Nielsen ends Q2 with $1.7 billion of debt, $36 million cash

By Lisa Kerner

Charlotte, N.C., July 3 - Stolt-Nielsen Ltd. paid down $28 million of long-term debt in the second quarter, ending with about $1.7 billion of debt on May 31, chief financial officer Jan Chr. Engelhardsten said during an earnings call on Wednesday.

The company had "good liquidity" that included $36 million of cash and $447 million available under its credit lines at quarter's end.

According to the CFO, Stolt-Nielsen's bank debt has a "normal profile where the debt is going down and down." A balloon payment of $120 million is due in 2014, and a three-year bond is coming up for renewal followed by bonds in 2016, 2018 and 2019.

"There will be a need to roll over those," Engelhardsten said.

In 2018, the company will need to renew its revolver that has $150 million maturing.

Of Stolt-Nielsen's debt, 71% is fixed and 29% has a variable interest rate, for an average interest rate of 5%.

"We maintained less than 1.5 to 1 of debt to equity, and at all times we have maintained over $200 million of cash," chief executive officer Niels G. Stolt-Nielsen said on the call.

Cash flow from operations of $71 million reflects improvements in the businesses in the quarter as well as a reduction in working capital due to stringent cash management efforts, according to Engelhardsten.

Stolt-Nielsen's debt to tangible net worth improved to 1.17 to 1 from 1.2 to 1 in the previous quarter.

Financial highlights

Stolt Tankers reported an operating profit of $5.0 million, compared with an operating loss of $2.8 million for the first quarter, due mostly to higher deep-sea contract rates.

Stolthaven Terminals reported an operating profit of $21.9 million, Stolt Tank Containers posted an operating profit of $20.8 million, Stolt Sea Farm reported an operating profit of $7.4 million, and Stolt-Nielsen Gas had a loss of $1.7 million on its investment in Avance Gas Holding Ltd.

For the fiscal second quarter, Stolt-Nielsen used net cash of $43 million for investing activities. For the first six months of the fiscal year, it used $133 million.

Stolt-Nielsen reported net profit attributable to shareholders for the period of $25.7 million on revenue of about $534 million, compared with $1.5 million and about $520 million, respectively, in the first quarter.

Net profit attributable to shareholders for the first six months was about $27 million, with revenue of about $1.1 billion, compared with $45 million and about $1 billion, respectively, in the first half of the prior fiscal year, the company's earnings news release said.

Since 2008, Stolt-Nielsen has grown its tanker fleet by 30% and raised more than $2.5 billion in bank and bond financing to fund its investments, according to the presentation.

London-based Stolt-Nielsen provides integrated transportation solutions for bulk liquid chemicals, edible oils, acids and other specialty liquids.

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