Dryships mid-year earnings

dryspr072810.pdf application/pdf Object.

I have just read through the earning release from Dryships for the 2nd quarter of 2010. I think Dryships management did a terrible job of managing the company through the boom and bust cycle of the shipping industry, but the company is starting to show some positive results.

Of note is the TCE for the company’s dry bulk fleet. The daily per ship earnings (TCE) for the 2nd quarter was $32,659 compared to $29,752 a year earlier. It has been a while since I have seen a meaningful increase in TCE. The Dryships fleet is primarily Panamax class vessels, so these are pretty strong rates.

Revenues were up and expenses were down for the quarter. Good signs. The company took a big hit on write-offs for interest rate swaps and interest expense was up 10% from a year earlier. These are indications of the previously mentioned management issues.

DRYS is way to speculative for my taste, but it is good to see some positive numbers coming from the dry bulk sector.

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Teekay Companies Boost Dividends

Excerpts from the press releases:

Teekay Offshore GP LLC, the general partner of Teekay Offshore Partners L.P. (Teekay Offshore or the Partnership) NYSE: TOO, has declared a cash distribution of $0.475 per unit for the quarter ended March 31, 2010, an increase of $0.025 per unit, or 5.6 percent, from the previous quarter.  The cash distribution is payable on May 14, 2010 to all unitholders of record on May 7, 2010.

Teekay GP LLC, the general partner of Teekay LNG Partners L.P. (Teekay LNG or the Partnership) TGP, has declared a cash distribution of $0.60 per unit for the quarter ended March 31, 2010, an increase of $0.03 per unit, or 5.3 percent, from the previous quarter. The cash distribution is payable on May 14, 2010 to all unitholders of record on May 7, 2010.

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Dividend Cuts

I have finally taken the time to update my shipping stock tracking portfolio in regards to the first quarter dividend distributions. Here are a couple of updates on individual stocks.

K-Sea Transportation KSP decided to conserve cash and is currently not paying a dividend. I have removed the stock from my dividend paying list.

Horizon Lines [[HRZ]] reduced the regular payout from 11¢ per share to 6¢.

It is probably not a coincidence that these two stocks are among the worst performing shipping stocks so far this year with K-Sea the worst, down over 20%.

Capital Product Partners LP CPLP paid a monster 41¢ dividend (4% of the stock value)  in February for the 4th quarter of 2009 but announced the target distribution rate of 90¢ per share (22.5¢ per quarter) for 2010. This still leave a better than 10% distribution rate if management can follow through.

There are currently 19 shipping stocks with an active dividend payment policy. The payouts declared or paid in the first 3 months of 2010 equate to an annual yield of just over 7%.

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Teekay Tankers forecasts dividends

http://www.teekaytankers.com/index.aspx?page=tnk_news&article_id=727

Teekay Tankers is projecting a first quarter 24 to 27¢ dividend to be paid in March. The company uses a mixture of fixed contract and spot market hires to provide an ongoing dividend plus upside if the rates take off.

The company states that the total dividend for 2010 would be in the neighborhood of $1.30 if rates stay at the current level and about 90¢ if they fall back to the level of last quarter of 2009. Those are pretty good prospects for a stock trading at about $9.00 per share.

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A Pair of Teekay Distribution Notices

Distribution notices out today:

Hamilton, Bermuda – January 27, 2009 – Teekay Offshore GP LLC, the general partner of Teekay
Offshore Partners L.P. TOO, has declared a cash distribution of $0.45 per unit for the quarter
ended December 31, 2009.  The cash distribution is payable on February 12, 2010 to all unitholders of record.

February 5, 2010.Teekay GP LLC, the general partner of Teekay LNG Partners L.P. TGP, has declared a cash distribution of $0.57 per unit for the quarter ended December 31, 2009.  The cash distribution is payable on February 12, 2010 to all unitholders of record on February 5, 2010.

These distributions remain the same for both companies. The payouts have been level for 6 consecutive quarters.Both TOO and TGP have current yields over 8%.

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Navios Maritime Partners increases dividend

Navios Maritime Partners L.P. – Investors.

Navios Maritime Partners NMM has increased their dividend payout again. The distribution will be bumped half a cent to a quarterly 41¢ per share. NMM has been well managed throughout the shipping slowdown with long term, insured contracts for their dry bulk vessels. It also helps to be able to skim the cream of the crop of vessels and contracts from Navios Maritime NM -(in my opinion). Navios Maritime Partners seems poised to be able to maintain or increase the dividend for the foreseeable future. The stock still yields close to 9.5%.

Note: I own a personal position in NMM

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World Shipping Routes

I found this map of the world shipping routes at wired.com courtesy of Bernd Blasius. It is interesting to see where the world’s shipping goes and how much of it there is.

Global Shipping Map

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Seaspan declares Q4 dividend

Seaspan Declares Dividend of $0.10 Per Share for Fourth Quarter 2009

HONG KONG, CHINA, Jan 22, 2010 (Marketwire via COMTEX News Network) — Seaspan Corporation (NYSE:SSW) announced today that the Company’s Board of Directors has declared a quarterly dividend of $0.10 per share for the three months ended December 31, 2009. The dividend will be paid on February 12, 2010 to all shareholders of record as of February 1, 2010.

Source: from the Seaspan press release

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Are Tanker Rates Headed Higher?

Capital Link Shipping | Investing In International Shipping Maritime.

A couple of comments on the above linked tanker market summary. Nice to see VLCC rates back above $85k. They averaged $25k for all of 2009.

There are only 50 VLCC tankers available in the Arabian Gulf for the next month. Typically, 90 of the big tankers are needed each month so spot rates could move significantly higher.

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Shipping Sector Flatlines

Shipping: The World’s Cheapest Sector Is About to Break Out — Seeking Alpha.

The article from Seeking Alpha linked above postulated that the shipping sector is seriously undervalued and due for a breakout to the upside. I am not sure about this analysis, and believe the shipping sector is composed of those companies that have their financial houses or order and those that do not. A serious amount of debt and future newbuildings casts shadow on the sector.

What I found interesting about the article was this chart of the SEA ETF:

SEA Chart

The shipping stocks as a group have shown virtually no movement for half a year. As I noted in a earlier post, shipping stocks were very split in 2009 as to gainers and losers. I think investors interested in this sector are better off analyzing individual stocks and making their decisions from there.

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