Baltic Dry Index: Turning The Corner
Jonathan Cho • 12 Comments
Jonathan Cho • 12 Comments
DryShips: Poised For An Upturn?
Andres Rueda • 18 Comments
Andres Rueda • 18 Comments
Mon, Mar. 14, 12:45 PM
Mon, Mar. 14, 11:12 AM
- Shipping rates are at an 11-year low, according to a reading of the World Container Index.
- The WCI Index is down 62% over the last 52 weeks.
- Oversupply continues to plague the sector. Last year, demand grew 1% to fall well-short of the 8% increase in capacity.
- Related tickers: DRYS, SBLK, SALT, DSX, PRGN, EGLE, NM, NMM, SB, SINO, SHIP, FREE.
Wed, Mar. 9, 3:23 PM
- Ocean Rig UDW (ORIG -22.9%) plunges after missing Q4 earnings expectations and saying "prospects for the industry remain bleak” and “are likely to remain so at least until 2018.”
- ORIG says it is in discussions with lenders of its loan agreement related to the consequences of Ocean Rig Apollo termination, and that the situation could evolve into a "significant prepayment" of the loan.
- ORIG says its fleet operated at 99.5% utilization during Q4, and FY 2015 fleet operating efficiency was ~98.2%.
- Although ORIG’s comments were more bearish than the outlook described by other offshore drillers, the company’s earnings are hurting other names in the space: DRYS -19.6%, SDRL -16.4%, RIG -2.3%, NE -5.7%, ESV -3.9%, DO -1.4%, RDC -4.4%, ATW -3.3%.
Tue, Mar. 8, 5:38 PM
Fri, Feb. 26, 5:04 PM
- Following a trading day during which shares closed at $0.10, DryShips (NASDAQ:DRYS) has announced a 1:25 reverse split that goes into effect on March 11.
- The split aims to put DryShips in compliance with the Nasdaq's $1.00 minimum bid rule. 26.9M shares will be outstanding post-split vs. a current 672M.
Mon, Feb. 15, 1:51 PM
- DryShips Inc. (NASDAQ:DRYS) announced today that Petrobras has given notice of termination on the contract for the platform supply vessel ("PSV") Vega Crusader effective March 6. The contract would have expired on January 8, 2017; the early termination represents a loss in contracted EBITDA of ~$2.2M.
- Further updates: "Given the prolonged market downturn in the drybulk segment and the continued depressed outlook on freight rates, the company is presently engaged in discussions with its lenders for the restructuring of its debt facilities. While discussions are ongoing, the company may elect to suspend principal repayments to preserve cash liquidity."
- "The sale of the Fakarava, Rangiroa and Negonego to entities controlled by our Chairman and CEO Mr. George Economou has failed. In addition, we have reached a settlement agreement with the charterer of these vessels for an upfront lump sum payment and the conversion of the daily rates to index-linked time charters.
- Related: Dry Bulk Shipping - How Low Can It Go And How Long Can It Last? (Jan. 31), The Transformation Of DryShips (Dec. 17), DryShips: Don't Waste Your Dollars On This Stock (Dec. 16)
Wed, Jan. 20, 9:45 AM
- The Baltic Dry Index is locked on its downward spiral with fresh lows being carved out every trading day of the year so far. The indices for Capesize, Panamax, Supramax, and Handysize vessels are all sharply lower.
- The sector has been rocked by the combination of excess capacity and sliding demand. By some estimates the number of vessels on the water are more than 50% higher than what's needed to pressure pricing and utilization rates.
- Drewry Maritime Equtiy Research thinks it could take as long as 18 months for the dry bulk market to normalize.
- "It’s a bloodbath which calls into question the survival of many dry-bulk shipping companies," notes shipping adviser Basil Karatzas.
- Related stocks: DRYS, SBLK, SALT, DSX, PRGN, NMM, NM, EGLE, SB, SINO, SHIP, FREE.
Dec. 7, 2015, 4:15 PM
- DryShips (NASDAQ:DRYS): Q3 EPS of -$0.03
- Revenue of $50.76M (-91.6% Y/Y)
Dec. 7, 2015, 2:24 AM
- Shippers are protesting a new marine shipping safety rule they say will raise transport costs and cause delays at ports worldwide.
- The regulation, which kicks in next July in 171 countries, requires exporters to certify the weight of containers before they're loaded for transport.
- Carriers say accurate weights are needed because heavy containers frequently damage cargo and even cause vessels to capsize, but shippers in many countries say they are ill-equipped to weigh so many containers.
- Related tickers: SHIP, FREE, EGLE, GNK, SINO, DRYS, NM, SBLK, DCIX, BALT, PRGN, SFL, KEX, SB, SALT, DSX, GOGL, MATX, EURN, NNA
Dec. 3, 2015, 7:15 PM
- Dry bulk shipping faces at least another year of pain, according to a new report from Drewry Shipping Consultants, which says companies in the industry will not return to profitability until at least 2017.
- Drewry says its dry bulk freight rate index fell 14.5% in September from August, and rates have fallen another 13.8% between September and November, although numbers for the full Q4 will not be available until early next year.
- "Demand has almost dried up,” Drewry’s lead analyst says. “China’s iron ore imports have stagnated, China’s coal imports have come down massively and India’s coal import growth has also slowed down."
- Drewry forecasts demand for iron ore growing at 3%-4% over the next few years, but says demand for coal, especially in China, will not rebound any time soon.
- Related tickers: DRYS, SBLK, SALT, DSX, PRGN, EGLE, NM, NMM, SB, SINO, SHIP, FREE
Nov. 19, 2015, 10:33 AM| Nov. 19, 2015, 10:33 AM | 22 Comments
Nov. 18, 2015, 3:59 PM
- Dry bulk shippers Star Bulk Carriers (SBLK -21.3%), Diana Shipping (DSX -5.1%) and Scorpio Bulkers (SALT -24.3%) all trade sharply lower following Deutsche Bank downgrades and price target cuts; additionally, SBLK's Q3 loss came in larger than expected.
- Industry rates have been falling sharply since August, and the Baltic Dry Index has declined every day since Oct. 22, -29% to 560; with declining dayrates comes lower ship values, which affects the related dry bulk shipping companies.
- Deutsche Bank downgraded SBLK, DSX and SALT to Hold from Buy, noting that a number of dry bulk companies are contemplating asset sales to raise liquidity, and a glut of "for sale" tonnage has negative implications for asset and equity values.
- Also: DRYS -0.6%, PRGN -6.8%, EGLE -7.1%, NM -0.3%, NMM -4.3%, SB -15.1%, SINO -7.8%, SHIP -3%, DCIX -4.3%, FREE flat.
Sep. 18, 2015, 1:11 PM
- The Baltic Dry Index rose 77 points, or +8.7%, overnight to 960, its biggest two-day gain in almost seven years amid speculation that Chinese iron ore purchasing is eroding the supply of vessels to collect the raw material from Brazil.
- The index rose 18% on Thursday and Friday, the most for two days since February 2009, and charter costs for capesize ships that take iron ore to China from Brazil rose by 16% to $14.59/ton.
- Overall capesize rates rose overnight by $2,782, or +23.4%, or to $14,658/day (+9.4% M/M); in the past two days, capsize rates are up $5,409, or +58.5%.
- "There’s a misunderstanding among investors that China isn’t buying iron ore... It is," says the managing director of Commodore Research. “China is still buying every single ton that global miners want to sell.”
- Related drybulk stocks include DRYS, GNK, PRGN, DSX, FREE, EGLE, NM, NMM, SBLK, KEX, SB, SINO, BALT, SHIP, DCIX.
Sep. 11, 2015, 11:32 AM
- DryShips (DRYS -4.8%) extends yesterday's heavy losses following its sale of 17 of its dry bulk vessels, as Deutsche Bank's Amit Mehrotra maintains a Hold rating for DRYS while reducing its price target to $0.35 from $0.50.
- Mehrotra estimates the equity value of the remaining 22 ships at $235M, or $0.35/share - i.e., the revised price target.
- Following previously announced tanker sales and yesterday’s news, the analyst estimates DRYS will have total debt of $380M, down from $1B-plus; cash of $195M, up from $10M; and an unchanged $160M stake in Ocean Rig UDW (ORIG -4.7%).
- "The moves effectively create a new base for the company to rise from, though it will likely be years before existing shareholders, who have almost been wiped out, to start recouping their losses," Mehrotra writes.
Sep. 10, 2015, 11:24 AM
- DryShips (DRYS -36.8%) plunges on news it agrees to sell 17 of its bulkers to other entities controlled by Chairman/CEO George Economou, a move analysts say is part of a longer-term plan to recapitalize the business.
- The 13 Capesize and four Panamax bulk carriers are being sold for a combined $377M, including their existing employment agreements and the assumption of $236M of debt.
- DRYS says it will recognize a ~$373M related impairment charge in its Q3 results as a result of the sale; also, DRYS says it will classify all remaining vessels in its fleet, comprised of 20 Panamax and two Supramax bulk carriers, as held for sale, resulting in an additional impairment charge of ~$422M in Q3.
- DRYS "has too much debt relative to its earning powers, relative to what rates are. They need to do something like this to recapitalize the company,” says Amit Mehrotra, Deutsche Bank’s lead shipping analyst.
Aug. 12, 2015, 9:51 AM
- The Baltic Dry Index fell 5.9% to 1093 in a reaction to developments in China. The BDI was off almost 3% yesterday.
- The downward swing was driven by a 15% decline in Capesize shipping rates.
- Notable movers: Dry Ships (DRYS -2.4%), FreeSeas (FREE -11.6%), Diana Containership (DCIX -5.4%), Genco Shipping & Trading (GNK -0.7%), Star Bulk Carriers (SBLK -1.8%), Navious Maritime Holdings (NM -1.7%), Safe Bulkers (SB -3.9%), Euroseas (ESEA -2.9%).
DryShips, Inc. engages in ocean transportation services for drybulk and petroleum cargoes. The company operates its business through three segments: Drybulk, Tanker and Drilling. The Drybulk segment provides drybulk commodities transportation services for the steel, electric utility,... More
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