Stolt reports earnings impacted by litigation costs

Stolt reports earnings impacted by litigation costs Stolt-Nielsen S.A., the chemical tanker operator, reported second quarter net income of $34.8 million, down from $57.4 million in the year-earlier period.
   Operating revenue for the quarter ending May 31 was $437.6 million, up from $391.7 million in the same 2006 period.
   The company — which has U.S. offices in Norwalk, Conn., transports chemicals in parcel tankers, barges, tank containers and is involved in aquaculture.
   Results reflected “strong market conditions in all businesses with good underlying operating performance offset by continued higher litigation-related costs,” Stolt-Nielsen said.
   During the quarter, it said “robust demand for chemical exports from the U.S. contributed to the continuing strength in the contract market for parcel tankers on all major trade routes.”
   It said “the outlook for the parcel tanker market over the near-term is positive,” but said it expected its “parcel tanker division’s results will also continue to be impacted going forward by cost pressures, partially driven by a shortage of qualified ship personnel, a weak U.S. dollar, and high steel prices, as well as volatile bunker fuel prices.”
   Stolt noted that last September the U.S. Justice Department’s antitrust division indicted the company and two executives alleging violation of the Sherman Antitrust Act. The company has moved to have the indictment dismissed, and it noted hearings were held on those motions last month. Stolt said the court has scheduled post-hearing briefing to be completed by Aug. 27, with a ruling to follow.
   “At this stage, it is difficult to give an indication of timing of the legal process thereafter,” the company said.
   It also said a European Commission investigation into the parcel tanker industry is continuing that alleges infringements of competition rules regarding the maritime transport of bulk liquids on deep sea routes. Stolt said it was granted provisional immunity by the EC in 2003 and would continue to cooperate with the proceedings.