Here are some more notes and impression on shipping stocks that presented at the conference.
General Maritime Corp.GMR Owner of 31 double hull tankers on long term time charters. They completed a merger with Arlington Tankers in December 2008 which added 35% to the fleet and also gave them exposure to the refined products shipping sector. The target dividend for 2009 is $2.00. My math show a yield of over 25%. For 2009, 6 vessels are scheduled for dry dock with a total of 320 days of off hire. They gave an interesting financial breakdown that goes like this: Total costs/expenses for the year including dividend of $304 million. The 77% of vessels currently on time charter will earn $250 million in 2009. The balance ($53 million) needs to be earned by the vessels on spot rate chartering. This breaks down to an average of $18,000 per day per ship. Good numbers to know and keep an eye on.
Navios Maritime HoldingsNM has 53 owned and chartered in dry bulk vessels in Capesize, Panamax and Ultra-Handymax sizes. The company has a high proportion of their vessels chartered for 2009 and 2010. NM holds 51% of NMM (see below). They also own a significant barge and port operation in South America. In 2008 they cancelled 3 new Capesize vessels and 9 new charter-in vessels, saving $265 million in capital expense at a cost of just $1.5 million. The presentation chart shows an additional 10 ships still on the company’s new building program. The company has $1.8 billion of future revenues insured by a AA rated insurance pool. NM pays a relatively low (10% ?!?) dividend that is 75% funded by the payout from NMM. Navios Maritime Holdings seems to have a creative management system and deserves a deeper look.
Navios Maritime Partners L.P. NMM is a MLP holding 9 drybulk vessels, 51% owned and managed by Navios Maritime Holdings. 2 Capesize vessels are on order to be delivered in mid 2009. NMM’s purpose is to provide high, growing distributions. NMM has 4.3 years of contracted revenues which are AA+ governmental insured. The current 40¢ quarterly distribution plus general partner payments have 1.24 times coverage. From the presentation: “Navios Partners is a synthetic AA class with no chartering risk until 2011.” Important item: distributions are reported on a 1099 instead of a K-1 and only a portion (36% in 2008) is taxable. Revenues can be increased by drop down vessels from Navios Maritime Holdings.
Overseas Shipholding GroupOSG is a crude and refined petroleum shipping company with both a U.S. flagged fleet and an international one. In the presentation they forecast a net shrinkage in the tanker market by the end of 2010. 99 single hull tankers must go out of service and there is no financing for new build vessels. 2008 adjusted earnings per share of $13.38! OSG can borrow on a unsecured basis. The company generates a lot of cash from operations ($450 million min EBITDA) per year to pay for expansion. This company has what appears to be a viable plan to grow their future profits.
I hope you got some good information from my quick recaps of these presentations.
JPMorgan Aviation & Transportation Conference highlights. Pt. II
Here are some more notes and impression on shipping stocks that presented at the conference.
General Maritime Corp. GMR Owner of 31 double hull tankers on long term time charters. They completed a merger with Arlington Tankers in December 2008 which added 35% to the fleet and also gave them exposure to the refined products shipping sector. The target dividend for 2009 is $2.00. My math show a yield of over 25%. For 2009, 6 vessels are scheduled for dry dock with a total of 320 days of off hire. They gave an interesting financial breakdown that goes like this: Total costs/expenses for the year including dividend of $304 million. The 77% of vessels currently on time charter will earn $250 million in 2009. The balance ($53 million) needs to be earned by the vessels on spot rate chartering. This breaks down to an average of $18,000 per day per ship. Good numbers to know and keep an eye on.
Navios Maritime Holdings NM has 53 owned and chartered in dry bulk vessels in Capesize, Panamax and Ultra-Handymax sizes. The company has a high proportion of their vessels chartered for 2009 and 2010. NM holds 51% of NMM (see below). They also own a significant barge and port operation in South America. In 2008 they cancelled 3 new Capesize vessels and 9 new charter-in vessels, saving $265 million in capital expense at a cost of just $1.5 million. The presentation chart shows an additional 10 ships still on the company’s new building program. The company has $1.8 billion of future revenues insured by a AA rated insurance pool. NM pays a relatively low (10% ?!?) dividend that is 75% funded by the payout from NMM. Navios Maritime Holdings seems to have a creative management system and deserves a deeper look.
Navios Maritime Partners L.P. NMM is a MLP holding 9 drybulk vessels, 51% owned and managed by Navios Maritime Holdings. 2 Capesize vessels are on order to be delivered in mid 2009. NMM’s purpose is to provide high, growing distributions. NMM has 4.3 years of contracted revenues which are AA+ governmental insured. The current 40¢ quarterly distribution plus general partner payments have 1.24 times coverage. From the presentation: “Navios Partners is a synthetic AA class with no chartering risk until 2011.” Important item: distributions are reported on a 1099 instead of a K-1 and only a portion (36% in 2008) is taxable. Revenues can be increased by drop down vessels from Navios Maritime Holdings.
Overseas Shipholding Group OSG is a crude and refined petroleum shipping company with both a U.S. flagged fleet and an international one. In the presentation they forecast a net shrinkage in the tanker market by the end of 2010. 99 single hull tankers must go out of service and there is no financing for new build vessels. 2008 adjusted earnings per share of $13.38! OSG can borrow on a unsecured basis. The company generates a lot of cash from operations ($450 million min EBITDA) per year to pay for expansion. This company has what appears to be a viable plan to grow their future profits.
I hope you got some good information from my quick recaps of these presentations.