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Cramer discusses Nordic American Tanker and chats with the CEO. Saves me the time to write up comments, since the covered the major points. NAT has done a great job of increasing the fleet during the downturn and the stock has held up well. Just need some of those $1.00+ quarterly distributions.

Nordic American Tanker results video »

Genco Shipping and Trading Limited earnings

By Tim | Published: October 29, 2009

Genco Shipping and Trading Limited – Press Release.

Genco Shipping GNK has released their 3rd quarter results, full report linked above. The company’s results look significantly better than those for Dry Ships earlier this week. Genco reported a net income for the quarter of $1.10 per share. This is compared to $2.00 per share in the 3rd quarter of 2008, before everything fell apart for the shipping industry. The company earned $1.20 in the 2nd quarter of 2008.

Good news:

  • GNK manages to bring an impressive 37% of their $93 million in revenues all the way to the bottom line.
  • Depreciation and amortization work out to another 70¢ per share, giving Genco a nice cushion of free cash flow.
  • There is only one more Capesize vessel on the order book to be delivered in the 4th quarter of 2009.
  • There has been no share dilution over the last year.

Negatives:

  • The company has a significant portion of their contracts expiring in 2010 at what are currently above market rates.
  • Quarter to quarter net income is still decreasing.
  • No dividends being paid.

GNK is attractive trading at about 5 times net income and 3 times free cash flow if those numbers can be stabilized at current levels. The shares have tripled off the 52 week low and are up 30%+ year-to-date. I think Genco is one of the better managed dry bulk companies, but I would be looking for either another share price pull back to the mid-teens or a stabilization of net income and a resumption of the dividend.

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Dry Ships struggles with earnings

By Tim | Published: October 27, 2009

dryspr102609.pdf application/pdf Object.

I will put my thoughts up early today about the Q3 earnings report from Dry Ships DRYS. The poster child for over exuberance in the shipping market, circa 2006 and 2007, does not show much besides staying slightly profitable.

Here are some of the figures that caught my eye:

  • Net income (without the interest rate swaps that continue to hammer earnings in this low rate environment) DRYS earned $74.9 million in the quarter compared to 180 million a year earlier.
  • TCE on the dry bulk vessels averaged $33k per day compared to $64k in 2008.

What makes these numbers even worse is that the vessel list still shows quite a few running on contracts at way above current market rates. The TCE will continue to fall. Even more exciting for share holder, the total number of shares outstanding has increased from 42.7 million to almost 254 million! Way to go management. Earnings fall by ove3r 50% and the share base is diluted by a factor of 5. I do not understand why the share price has only fallen by a third so far this year.

It appears there are still some uninformed shareholders/buyers who think this company can recover to its former glory and hype. I think this company still is in trouble and all of the dilution and debt restructuring may not save it from eventual bankruptcy.

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By Tim | Published: August 25, 2009

Here is how the various Baltic Exchange shipping indices fared for the week ending 14 August.

  • Baltic Dry Index (BDI):  -10.3%
  • Baltic Capesize Index (BCI): -14.4%
  • Baltic Panamax Index (BPI): -6.1%
  • Baltic Supramax Index (BSI): +1.4%
  • Baltic Handysize Index (BHSI): -0.7%

  • Baltic Dirty Tanker (BDTI):  +5.2%
  • Baltic Clean Tanker (BCTI): -4.2%

Here are the results of the corresponding stock indices, courtesy of Capital Link Shipping:

  • CL Dry Bulk Index: -1.5%
  • CL Tanker Index: +0.3%

Drybulk shipping rates continue to slide but related stock prices are holding up OK. These days the BDI seems to have little effect on stock prices. Oil tanker owners are starting to see an uptick in rates, especially for Suezmax tankers.

I apologize for the light posting over the last few weeks. I plan to get back to daily writing for this site.

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Baltic Indices for Last Week

By Tim | Published: August 17, 2009

Here is how the various Baltic Exchange shipping indices fared for the week ending 14 August.

  • Baltic Dry Index (BDI):  -0.7%
  • Baltic Capesize Index (BCI): +5.9%
  • Baltic Panamax Index (BPI): -8.0%
  • Baltic Supramax Index (BSI): -7.1%
  • Baltic Handysize Index (BHSI): -0.4%

  • Baltic Dirty Tanker (BDTI):  +0.6%
  • Baltic Clean Tanker (BCTI): -2.8%

Here are the results of the corresponding stock indices, courtesy of Capital Link Shipping:

  • CL Dry Bulk Index: -1.9%
  • CL Tanker Index: +0.0%

Although the numbers above do not show it, the Baltic Dry Indices managed to halt their 3 week slide over the last 2 days of last week. The dirty tanker index looks like a pool table for the last 3 weeks, holding on at break-even for most tanker owners. The outlook for the U.S. stock market is negative for the start of this week, so we will see if the shipping stocks can buck the trend or present some buying opportunities.

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Navios Maritime Partners quarterly earnings

By Tim | Published: August 12, 2009

Navios Maritime Partners L.P. – Investors.

The quarterly earnings press release for Navios Maritime Partners LP NMM is linked above. NMM continues to run a painless operation for the income investor. The company’s business model has all of the vessels leased in at abou $12k per day and leased out at an average of about $26k per day. The current fleet is 100% chartered through the end of 2010 and 80% for 2011. All charter contracts are AA insured. Free cash flow adequately covers the current distribution.

Recent news concerning future fleet growth point toward positive revenue and distribution growth over the next few years. This company is almost a little scary how steady the future appears, but I do not see a downside at this time. The 20/20 rear view mirror makes me wish I had picked up a bunch of this stock when it was trading for under $3.50 a share. Hard to believe 9 months later. I do own a position in NMM.

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Baltic Indices for Last Week

By Tim | Published: August 10, 2009

Here is how the various Baltic Exchange shipping indices fared for the week ending 7 August.

  • Baltic Dry Index (BDI):  -17.3%
  • Baltic Capesize Index (BCI): -17.5%
  • Baltic Panamax Index (BPI): -18.3%
  • Baltic Supramax Index (BSI): -11.6%
  • Baltic Handysize Index (BHSI): -6.1%

  • Baltic Dirty Tanker (BDTI):  +0.0%
  • Baltic Clean Tanker (BCTI): -0.7%

Here are the results of the corresponding stock indices, courtesy of Capital Link Shipping:

  • CL Dry Bulk Index: -6.8%
  • CL Tanker Index: +2.7%

It was a tough week for the dry bulk shippers BDI while the rest of the market stayed in positive territory. I have not seen any news that would account for the decrease in the dry bulk indices. Let us see how this week starts out.

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Nordic American Tanker declares dividend

By Tim | Published: August 7, 2009

Nordic American Tanker NAT has released its usual cryptic quarterly earnings report. The quarterly dividend will be 50¢ compared to 88¢ in Q1. Average daily charter rate was $26,300 for the quarter. The press release noted the Imarex Tanker index reported an average of $20,500 per day for Suezmax tankers, with a low of $9,500 and a high during the quarter of $38,900. 

Almost a month and a half into the 3rd quarter, the spot tanker market still sucks, so the 3rd quarter will probably look a lot like the 2nd. The stock price has been hanging in above $30. For long term investors, this company is a buy when it drops into the $20’s. I own a personal position in NAT>

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K-Sea Transportation pays big dividend, reports earnings

By Tim | Published: August 5, 2009

http://ir.k-sea.com/

K-Sea Transportation KSP has announced their results for the 4th quarter and the continued payout of the 77¢ quarterly distribution. Revenues and earnings continue to fall for this U.S. based barge shipper of petroleum products.  Cash for distribution was only 85% of the amount to be paid out this quarter. For the entire year K-Sea had a 92% cash flow coverage of the distribution.

Investors holding this stock for the income should be nervous. Company management contends they will continue the distribution rate through the end of 2009. We shall see.

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Overseas Shipholding Group quarterly earnings

By Tim | Published: August 5, 2009

http://ir.osg.com/2009Q2earnings

The 2nd quarter earnings for Overseas Shipholding Group OSG are a wake-up call for the tanker group. Net income for the 2nd quarter was a loss of 33¢ per share compared to a $2.81 a year earlier. Spot VLCC TCE rates fell from $98k per day to $32k, knocking almost $140 million or 35% out of revenues.

OSG is financially in excellent shape and the market has responded to the earnings today by driving the share price up 4%. This report is a wake up call on how weak the rates in the tanker business currently are and I do not see much chance of improvement in the next 6 months. I am surprised how well the shares of tanker stocks are holding up. The tanker group as I track them is up 7% YTD and OSG is down only 12%. I would expect a pull back in tanker stock prices if the current rate environment holds.

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Excel Maritive earnings report

By Tim | Published: August 5, 2009

http://www.excelmaritime.com/uploads/EXM_Press_2Q09.pdf

My regular laptop is in the shop for a tune-up and I am working with the slow a bulky laptop. In spite of this tremendous handicap, I will endeavor to put out some meaningful earnings report analysis over the next few days.

Excel Maritime Carriers EXM, and operator of 40+ drybulk vessels saw revenue and profits for the 2nd quarter of 2009 come in significantly below the same quarter in 2008. Net income, excluding one-timer non-cash hyphenated stuff, was 85¢ per share compared to 2008 Q2’s $2.50. Average TCE fell from over $33k per day in 2008 to just over $22,000 per day for the recently closed quarter.

Management was happy to point out that EBITDA increased from $53 million in Q1 to $57 million in Q2. Net income did not follow however, my math shows the company netted $2.07 per share in the 1st quarter net of the nets. Q1 and Q2 press release do not jive concerning the net income after special item numbers for Q1 at least to my fast read.

Still this is a company that made almost $3.00 per share in 6 months plus about a $1.00 per share in depreciation gives pretty attractive cash flow for a $9.00 stock. Excel has a pretty small percentage of their fleet committed to long term contracts so the have some upside if rates climb. Downside is still a mountain of debt and the suspended dividend.

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