Stolt-Nielsen Ltd Ord

Good afternoon and welcome to Stolt Nilsson's Earnings Call for the third quarter of 2025. As always the earnings release and related materials are available on our website. We will also be recording this session and playback will be available on the website from tomorrow. Included in this presentation are various forward-looking statements. Such forward-looking statements are subject to risks and uncertainties and we refer you to our latest annual report for such details. I'm Alex Ng, Vice President of Corporate Development and Strategy. Joining me today are Udo Lange, CEO, and Jens Gunnar Heger, CFO. At the end of the presentation, there will be a Q&A session where we will be taking questions from online. To ask a question online, simply type into the Q&A function on your screen.

Thank you, and over to you, Udo.

Thanks, Alex. Welcome everyone and thanks for joining us today for our third quarter results. The presentation will follow the usual format. I will begin with an overview of the group's results for the quarter and share key highlights. Then Jens will cover the financials before handing back to me, who runs through the performance of our divisions, our view of the market outlook and a few concluding remarks. Despite a challenging macro backdrop of ongoing global trade and geopolitical uncertainty, our businesses enjoyed a resilient performance, delivering a quarterly EBITDA of over 190 million and a last 12 months EBITDA above 800 million for the sixth quarter in a row. The company has delivered consistent performance again this quarter. This has been achieved through the dedication, professionalism, and spirit of our 7,000 people around the world working tirelessly in pursuit of being simply the best for our shareholders, customers, and people. Our portfolio also builds in resilience to market fluctuation. With 45% of our EBITDA this quarter achieved outside of Stoll Tankers. while Stoll Tanker's EBITDA fell 27% from the same quarter last year. The other areas of our operations delivered an increase in EBITDA of 13%, diluting the impact of softer shipping markets. These results demonstrate that the company is a liquid logistics solutions provider and show the impact of our diversified portfolio. Last week saw the annual EPCA conference in Berlin. That's the European Petrochemical Association event that brings together some of our largest global petrochemical customers. We met many of our customers and heard from them the challenges they are facing as they navigate the current uncertain market conditions. We also heard directly how our suite of liquid logistics solutions across the supply chain is more relevant than ever. Our value proposition delivering quality, reliability, and flexibility is meeting our customers' needs and has supported another resilient quarterly performance. I want to reiterate the message we first communicated at our Capital Markets Day last year. We are not a shipping business, but a logistics business. To help our investors and analysts, we have focused our commentary on our liquid logistics operations, which contribute nearly 90% of our EBITDA, and so we will notice that we have scaled back our commentary on Stoll Seafarm and gas operations. You may also remember that at the time of our Q2 report in July, we evolved how we communicate our earnings potential, aligning our guidance approach with our business model by providing EBITDA guidance for the full year 2025. Today, we have refined our range. This 2025 EBITDA is now expected to be in a range of $750 to $700 million. Of course, this range is based on what we know today, assumes no substantial geopolitical changes, and is subject to a number of uncertainties in the current operating environment. As always, we continue to maintain a conservative balance sheet benefiting from robust liquidity and well-spread debt maturities. Let's now turn the page to review our financial highlights. I've already said we have delivered another consistent result despite a challenging operating environment. Moving along the top row, operating revenue was down nearly 5% or $33 million, predominantly driven by weaker freight rates and stalled tankers. EBITDA before the fair value adjustment was $192 million, down $23.5 million on the record levels from last year. Operating profit was down year-over-year by 30 million partly due to the additional depreciation applicable to the HS4 ships and Avenir. Net profits was also down driven by the same factors as well as higher interest expenses due to the consolidation of acquisition debt. Free cash flow was down 77 million year-over-year driven by higher capex including the NSD new building deposits, higher interest expense, and sale of two vessels in the third quarter last year. Net debit to EBITDA has increased to 2.94 times as a result of an increase in consolidated debt from HS4 and Avenir. Over the page, we look at some of the key drivers of performance.