Stolt-Nielsen Ltd Ord

Good afternoon and welcome to Stolt Nielsen's Earnings Call for the second quarter of 2026. As always, the earnings release and related materials are available on our website. We will be recording this session and playback will be available on the website 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 further details. I'm Alex Ng, Vice President of Corporate Development and Strategy. Joining me today are Udo Lange, CEO, and Jens Gruner-Hegge, CFO. At the end of the presentation, there will be a Q&A session where we will take questions. To ask a question, simply type into the Q&A function on your screen. Thank you. And over to you, Udo.

Thank you so much, Alex, and good afternoon, everyone. As usual, I will open with a group highlight for the quarter. Jens will then walk you through the financials, and I will come back to cover each of our divisions in turn, our view of the market, and then closing thoughts before we move to questions. With that, let's turn the page. We delivered a steady performance in the second quarter, despite the market shock in the Middle East causing significant market disruption. Group EBITDA came in at 177 million, which is a strong performance in the context of the closure of the Strait of Hormuz, which has reshaped global supply chains over the last four months. The relative stability of the results are a testament of the diversification of risk within our business model. We are not a shipping company that does logistics. We are a logistic company that operates ships. Stoltenkers delivered a stable quarter-on-quarter performance despite the volatile market, and non-tanker activities contributed 45% of group avatars this quarter, with Stolthaven Terminals achieving its highest-ever quarterly operating profit. The ceasefire framework announced in June allowed for a period of increased shipping activity in the region. However, the situation remains volatile. We are monitoring developments day by day. Near-term market visibility remains unclear and we remain cautious so have chosen not to reinstate earnings guidance at this time. That said, we do expect our performance to improve in the third quarter of the year. We will say more on the market and outlook later. Two other points I want to highlight. During the quarter, we were happy to announce the launch of a new digital innovation center. Innovation is embedded in how we solve problems, improve performance, and create long-term value. The opening of our digital innovation center in Hyderabad is a meaningful step forward in how we use data and AI across the group. And following approval at the AGM in April, we paid a final dividend of $1 per share in May, bringing the total dividend for 2025 to $2 per share. Let's move to our financial highlights on the next page. Taking the key Q2 performance metrics in turn. Revenue was $750 million, up around 5% on the same quarter last year. This is largely the effect of the Suttons acquisition by STC. EBITDA was $177 million, down 16% year-over-year, reflecting softer tanker rates, tighter margins at STC, and Suttons integration costs. Operating profit was $94 million, down 70.5% year-over-year, impacted by lower contract freight rates, as well as Suttons ENG and integration costs. Net profit was 52 million, down 31%, driven by the same factors, as well as FX losses in Q2 of 26 versus an FX gain in Q2 of 25. Free cash flow was strong at 100 million. This was impacted by higher capital expenditure in the comparator, largely due to new building deposits and stole tankers to adventures. Net debt to EBITDA stood at 3.16 times. This increase principally reflects lower EBITDA as net debt has remained relatively stable. The underlying resilience of our business is clear from the cash generation and operating performance relative to the external environment. Over the page, let's look at some of the key drivers of performance. At Stoltenkis, Deep Sea TCE per operating day came in at $23,372 per operating day, a decline of 11% on the prior year. Despite the headline, we are pleased to have seen a reversal of the downward trend in TCE, with increases month-on-month during the quarter. Stoltenkis saw positive utilization development, which rose to 93.4%, Up 1.3 percentage points versus last year, helped by new business. Gross profit per shipment fell 16.5% year-over-year at STC, which reflects the margin pressure within that market, even as shipment volumes grew strongly on the integration of Sutton's. Looking at the EBITDA breakdown, non-tankers contributed 45% of the total, up from around 42% in the same quarter last year, showing the importance of our diversification. Jens, over to you for the financials.

Thank you, Udo. Good afternoon and good morning to those of you joining us from the U.S. I will compare the second quarter of 26 against the second quarter of 25, and just as a reminder, our second quarter started March 1st and ended on May 31st. So, let's dive into the numbers for this quarter. Revenue, as mentioned, was up $37.4 million over the same quarter last year, predominantly driven by the acquisition of Sutton's, which contributed $36.7 million in revenue this quarter. Stolkhaven Terminals, and Stoltz Seafarm increased by 2.5 million and 5.5 million respectively, and that was offset by 11.4 million lower revenue in Stoltz tankers, as mentioned by Udo, mostly due to lower COA freight rates due to carbon mix, and as rates have gradually come off their peaks that we saw in late 2024. Operating expenses increased by 43 million, mainly due to the additional substance shipments and the related expenses, as well as the consolidation of avalier and added shipowning expenses due to a larger wholly owned fleet partly offset by lower time charter expense and lower bunker costs. Depreciation expense was $3.2 million higher than the same quarter last year and this was due to the reduction in the residual value of ships following a fall in steel prices towards the end of 2025 requiring an upwards revision in depreciation. Also, The net asset base increased following the acquisition of Sutton's and hence also the depreciation. But note that we have recorded Avenir as a health for sale business and as such we are no longer depreciating the Avenir assets on our books and the impact of that was 4.1 million and you can see that in the reduction in depreciation from the first quarter of this year. JV Equity Income was lower due to the weakening of chemical tanker markets over the last 18 months, and ANG expense was up 11.5 million, and that was predominantly driven by the addition of Sutton staff and the integration costs, as well as last year's, or one year's worth of inflation and an increase in IT development costs. This was partly offset by lower profit-sharing accruals. Gain on sale of assets related to the sale of three ships during the quarter, and with that we ended up with an operating profit for the quarter of 93.8 million, and that's down from 113.7 in the second quarter last year, but up 12 million from the first quarter of this year. Debt Interest Expense was down 4.7 million compared to the second quarter of 2025, as debt levels had come down from the peak seen last year following the acquisition of Sutton's, Hustler Shipping, and Avenir. And note that we also had a negative swing in FX, as Udo mentioned. That swing was 11.2 million against us, compared with the same quarter last year. And as such, The net profit for the quarter was 51.7 million, with EBITDA of 177.3, down from 75.2 and 210.1 million, respectively, in the same quarter last year. Let's go and take a look at the cash flow. Net cash flow operations was down this last quarter, predominantly reflecting the weaker earnings and higher working capital outflow, as well as lower JV dividends. Net operating cash flow benefited from lower interest payments and lower income tax paid compared to the same quarter last year, and that was predominantly driven by the lower results in STC. Net cash used in investing activities was lower at 34.5 million, and that was down from 86.4 million last year, and that's due to lower capital expenditure and investments in JVs, partly offset by lower proceeds from sale of assets. The sales proceeds predominantly relate to three shifts sold during the quarter, as I mentioned in the previous slide. Net cash used in financing activities of 97.9 million reflected dividends paid in May this year, and continued net repayments on debts and leases. And as such, total cash flow for the quarter was a negative 38.5 million, and as you can see on the graph at the bottom right, we ended the quarter with $495 million in available liquidity. Going over to the capital expenditures. During the quarter, this totaled $34 million, with most of it spent on terminals expansions, tankers, life extensions of existing tonnage, as well as salt sea farm expansion topics. Overall, for 26, we expect to spend approximately $290 million, That will grow to 537 million in 27 as deliveries under the new building program for tankers accelerate. You'll see that with a 372 million in 27 and just want to note that most of this has or is close to already being financed. Note that this overview excludes tankers' dry docking costs and Avenir's capex as Avenir is accounted for as held for sale as I mentioned earlier. We intend to continue to invest strategically in our businesses, but we also need to focus on integrating our added capacity into our operations for maximized long-term benefit for our customers and our shareholders. And with the current geopolitical uncertainties, we will be cautious with committing to further capex until we see the full effects of the current unrest. Going over to the debt profile, this is our debt maturity profile. Just to explain, the grey boxes represent normal principal repayments, while the black and orange reflect balloon payments on bank loans and bonds, respectively. The repayment profile peaks in 2028, and you can see with the orange box there, we have the first significant maturity, and that's one of our maturing bonds out of the two bond issues outstanding. Looking at the bottom left graph, Rolf Stepp, reduced in the second quarter due to the Avenir being accounted for as held for sale. So $143 million in Avenir debt is no longer included in this overview. Our average long-term interest rate in the second quarter was 5.58%, a continued reduction from the previous quarter as our corporate finance team, led by Julian Billard, continued to refinance our debt at improved rates. And finally, The continued steady performance of the company supports our covenants. The decrease in debts during the second quarter helped reduce debts to tangible net worth to 0.97. The reduction in EBITDA over the last year have brought the rolling last 12 months EBITDA down to $745 million, down from $825 million in the second quarter of 2025. And this has had a slight negative impact on the net debt to EBITDA ratio, which increased to 3.16, whilst EBITDA to interest expense was down to 5.25. That said, overall, we have substantial headroom on all covenants. And with that, Udo, I'd like to hand it back to you.