The below is a translation of an article in the Norwegian finance magazine Kapital, written by Jan Christian Grande and published on December 21, 2022.
After a long-lasting uphill battle, the luck has finally turned for Odfjell. The turnaround began seven years ago. At that time the shipping company was teetering on the brink of bankruptcy. Since then, the share price in Odfjell SE has risen 240 percent. In the past year alone, the rate has risen by more than 150 percent.
- The company consistently produces strong earnings and has a well-defined dividend policy, claims Laurence W. Odfjell, principal owner and chairman of the family-controlled Odfjell Group.
In the global market for the seaborne transportation and storage of chemicals and other specialty bulk liquids, the Odfjell Group is a market leader. Their fleet consists of 70 ships operating globally, and their most modern ships may carry up to 52 different liquids simultaneously.
With more than 100 years of experience in shipping, The Odfjell family is well acquainted with the unpredictable and volatile nature of the shipping industry. For the time being, however, things seem to be running smoothly.
- Our good results are primarily market-driven. While the supply side has stagnated, demand levels remain steady. Due to the sanctions against Russia, the number of new contracted building projects has gone down, whereas the distances traveled by the existing ships have gone up, Odfjell shares with Kapital.
Additionally, he notes that the environmental regulations of the International Maritime Organization (IMO) will place a limit on the ships’ speed, and that the older chemical ships are increasingly exiting the global market.
The market situation, combined with the fact that Odfjell has a new and environmentally friendly fleet as well as a sharp and competent organization, give the company an excellent chance to benefit from the market's current upswing.
This fall, the chairman was assessed by Kapital to have a net worth of NOK 2.6, an increase of NOK 800 million from 2021.
The 56-year-old has a controlling ownership position; therefore the majority of the family fortune was assigned to him in regard to the list of Norway's 400 richest. In addition to owning 39 percent of the listed Odfjell SE, he and his family also own Rederiet Odfjell, which has a number of subsidiaries in property and shipping.
It was not a given that Laurence, as the second oldest of five siblings, would be the successor of his father, the shipping legend Dan Odfjell (84). Laurence witnessed first-hand how much time his father spent away working or traveling as a child. This way of life did not appeal to the son, who eventually went on to study architecture at Yale University.
However, as fate would have it, the father and son ended up collaborating on the construction of a vineyard in Chile. It was through this collaboration they opened their eyes up toward one another, and starting from 2000 Laurence traveled around the world to work in his father's company.
- Have you set any future goals for the company?
- First and foremost, we are pleased to finally be able to pay a dividend to our patient shareholders. At the same time, it is a long-term goal to reduce our cash break-even so that we will be better equipped to face a potential future downturn.
According to Odfjell, this primarily entails paying off debt and further adapting the contract portfolio.
Furthermore, the company has a strong focus on decarbonization and has roughly cut its carbon intensity by half compared to IMO's criteria for 2008.
- This will remain a focal point and will only grow in importance in the coming years. Finally, I'd like to discuss digitalization. We operate in a high-cost country, and we must continue to streamline our core processes if we are to remain competitive.
It has been many years since Odfjell announced a move from Bergen to Singapore in order to avoid wealth tax. He has made a home there with his wife and son.
- On my part, this is primarily to avoid being forced to pay a dividend when the company does not have dividend capacity. However, I am actually considering moving to Norway for a couple of years, so that my son can learn Norwegian.
