LONDON, July 10, 2003 (PRIMEZONE) -- Stolt-Nielsen S.A. (Nasdaq:SNSA) (OSE:SNI) today reported results for the second quarter ended May 31, 2003. Net loss for the latest quarter was $50.4 million, or $0.92 per share, on net operating revenue of $742.7 million, compared with a net income of $0.2 million, or $0.00 per share, on net operating revenue of $678.4 million for the second quarter of 2002. The basic weighted average number of shares outstanding for the quarter was 54.9 million compared with 54.9 million for the same period in 2002.The net loss for the six-month period ended May 31, 2003 was $63.4 million, or $1.15 per share, on net operating revenue of $1,507.0 million compared with a net loss of $3.5 million, or $0.06 per share, on net operating revenue of $1,289.6 million for the same period in 2002. For the six-month periods of 2003 and 2002, the weighted basic average number of shares outstanding was 54.9 million.
Commenting on the results, Niels G. Stolt-Nielsen, Chief Executive Officer of Stolt-Nielsen S.A. said, "While the overall results for the Company for the quarter were disappointing, we take comfort in the continued strength and improvement in the results of our core transportation business. As expected, Stolt Offshore reported poor results primarily due to downgrades taken on three projects in West Africa and Egypt. While pricing remains strong in the North American market, overall Stolt Sea Farm's results were negatively impacted by weak prices in Europe and Asia.
"Before restructuring charges, the Stolt-Nielsen Transportation Group Ltd. (SNTG) reported income from operations of $33.2 million in the second quarter of 2003 compared with $31.5 million in the second quarter of 2002 and up significantly from the $24.0 million reported in the first quarter of this year. For the six-month period in 2003, income from operations before restructuring charges was $57.2 million compared with $61.2 million last year.
"SNTG's parcel tanker division reported income from operations of $22.5 million in the second quarter of 2003, up from $20.9 million in the second quarter of 2002 and $16.1 million in the first quarter of 2003. The Stolt Tankers Joint Service Sailed-in Index in the second quarter of 2003 was up 5% from the first quarter of 2003. Parcel tanker operations benefited from lower, although still historically high, bunker fuel prices, compared with the first quarter of this year. SNTG won several new contracts during the quarter. Existing contracts of affreightment were rolled over at levels broadly in line with a year ago. During the second quarter, the 12,775 deadweight ton M/T Stolt Sakra was scrapped."
"At SNTG's tank container division, income from operations increased to $7.0 million in the second quarter of 2003 from $6.4 million a year ago. The second-quarter results also represented a major improvement from the $3.4 million in income from operations in the first quarter of this year. Utilization in the second quarter rose to another new record of 81.5% with shipments up some 20% for the first six months of this year compared with the same period last year.
"SNTG's terminal division reported income from operations of $3.7 million in the second quarter of 2003 compared with $4.1 million in the second quarter of 2002. Utilization remains strong. Stolthaven has ongoing expansions in Houston, New Orleans, U.S.A.; and Ulsan, Korea; and recently completed expansions in Shanghai, China; Westport, Malaysia; and Santos, Brazil. "Before minority interests, Stolt Offshore S.A. (SOSA) reported a net loss for the quarter of $91.2 million compared with a net profit of $4.8 million for the same period last year. The loss in the quarter is primarily the result of downgrades taken on three projects in West Africa and Egypt. Of these projects the Burullus contract in Egypt, with the exception of some insurance work, is complete; the OGGS contract in Nigeria is 81% complete; and the Bonga project is 50% complete. Provisions were made on a number of smaller projects, in respect of risk on collection of receivables, lower activity levels and lower ship utilization. Otherwise offshore operations elsewhere have generally gone well during the quarter. However, revenue timing differences resulted in an under recovery of overheads at the quarter end. SOSA's backlog now stands at $1.4 billion, of which $656.0 million is for 2003. This compares with a backlog of $1.6 billion at this time last year of which $766.0 million was for 2002.
"Stolt Offshore's new management has, over the last three months, been working to improve the business, operations, and financial position of the company. A Blueprint for financial recovery is now a live management tool that will be further developed and refined in the coming months. The Blueprint addresses the strategic positioning of SOSA, the sales of non-core assets and business lines, and further changes to SOSA's management team and a streamlining of its organization.
"Stolt Offshore has reached agreement with its banks with regard to covenant arrangements through to November 30, 2003. On the basis of current projections Stolt Offshore will not be in compliance with its existing covenants at the test date of November 30, 2003. As a result of this, in accordance with U.S. GAAP reporting requirements Stolt Offshore has classified all of its debt as short term. Over the next several months Stolt Offshore, along with Stolt-Nielsen S.A., will work closely with its main banks to put into place a permanent financing arrangement commensurate with the new business plan.
"As result of Stolt Offshore's current projections indicating it will not be in compliance with existing bank debt covenants on November 30, 2003 and SNSA's loan agreements' cross-defaulting provisions, SNSA has classified all its debt as short term in accordance with U.S. GAAP reporting requirements. SNSA will be able to reclassify the appropriate debt to long term when Stolt Offshore's permanent financing arrangement is concluded.
"Stolt Sea Farm Holdings plc (SSF) reported a loss from operations in the second quarter of 2003 of $8.1 million compared with a loss from operations of $10.7 million in the second quarter of 2002. While spot prices in North America remained strong and improved from earlier of this year, SSF's results were held down by some contract commitments.
"Pricing in Europe remains depressed. There are some signs that the long-anticipated industry shakeout has begun in Norway, as several significant players fell under the control of banks or declared bankruptcy. But most market observers now believe that the beneficial effects of the current liquidity squeeze in Europe will likely not be seen in prices for at least 18 months, when the current lower juvenile inputs will result in reduced volumes coming to market. In Asia, particularly in Japan, markets were weak in the quarter. Some parts of the significant salmon trout and coho purchases committed at the start of the year have resulted in losses when sold at lower price levels in this latest quarter, but prices started to recover later in the quarter. The turbot operations in Iberia continue to perform well. In recent weeks we have also begun the seasonal harvest of Southern Bluefin tuna.
"The outlook for SNTG remains rock solid. I firmly believe SOSA is on the right track with its new management team in place and the development and implementation of a new plan for financial recovery well underway. SSF results are likely to be negatively impacted for the remainder of this year due to the current weak pricing environment in Europe." Mr. Stolt-Nielsen concluded.
About Stolt-Nielsen S.A.
Stolt-Nielsen S.A. is one of the world's leading providers of transportation services for bulk liquid chemicals, edible oils, acids, and other specialty liquids. The Company, through its parcel tanker, tank container, terminal, rail and barge services, provides integrated transportation for its customers. The Company also owns 63 percent of Stolt Offshore S.A. (Nasdaq:SOSA; Oslo Stock Exchange: STO), which is a leading offshore contractor to the oil and gas industry. Stolt Offshore specializes in providing technologically sophisticated offshore and subsea engineering, flowline and pipeline lay, construction, inspection, and maintenance services. Stolt Sea Farm, wholly-owned by the Company, produces and markets high quality Atlantic Salmon, Salmon Trout, Turbot, Halibut, Sturgeon, Caviar, Bluefin Tuna, and Tilapia.
Forward-looking Statements Certain statements made in this press release may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements may be identified by the use of words like "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "project," "will," "should," "seek," and similar expressions. The forward-looking statements reflect our current views and assumptions and are subject to risks and uncertainties. The following factors, and others which are discussed in our public filings and submissions with the U.S. Securities and Exchange Commission, are among those that may cause actual and future results and trends to differ materially from our forward-looking statements: the terms, conditions and amount of our indebtedness; our ability to recover costs on significant projects; the general economic conditions and competition in the markets and businesses in which we operate; the outcome of legal proceedings; the impact of negative publicity; environmental challenges and natural conditions facing our aquaculture business; the impact of laws and regulations; uncertainties inherent in operating internationally; our relationship with significant customers; and operating hazards, including marine disasters, spills or environmental damage. Many of these factors are beyond our ability to control or predict. Given these factors, you should not place undue reliance on the forward-looking statements.
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