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ramisle

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  • Time To Sink Diana Containerships [View article]
    Truffle,
    The Box Ships deal is another example of a sale and leaseback with a major container line. The container lines are ridding themselves of older tonnage in order to buy the new 10,000 TEU ships.

    The nature of the deal is that a company like DCIX pays $30 million for a ship that is worth $15 million, and in return DCIX gets an above market charter for $25,000 per day, when the going rate is $10,000 per day.
    This gives DCIX, and Boxships the cash flow to pay the dividend.
    The problem is, the Garnett will be 20 years old at the end of the charter and will be due for it's fourth special survey. So unless demand increases dramatically, and companies stop ordering the new ships, the Garnett will be scrapped, at a sizable impairment.

    DCIX talked about this during the CC, when asked about the charter expirations coming this spring. They said they have enough liquidity to do another deal if charter resets are poor.
    Maybe they'll give more insights into this after the next ER.
    Feb 7, 2013. 08:14 AM | Likes Like |Link to Comment
  • Time To Sink Diana Containerships [View article]
    I'm really not going to try to project what they will do with the dividend.
    With this crowd I'm trying to make the argument that ,
    No, you don't need a crystal ball to know what a companies charters, revenues and earnings are going to be in the coming year. Shipping is very transparent. The "Known knowns" are there if you are willing to do the homework.
    The one thing that could help maintain it's earnings is to have a few more "sale and leaseback" deals. That will inflate earnings and revenues over two or three years, but in the end will result in Diana taking a large impairment.

    That is the part of these deals that your detractors don't realize. And the reason why the book value is inflated.
    The value of the Garnet in Nov 2012 was not $30 million. Charter free.
    And the going charter rate for a 1995 Panamax 4,700 TEU ship, for three years, was not $27,000 a day.
    That's the way a purchase-leaseback works.
    The same week that the Garnett was purchased. A newer, 2003, bigger, 5,900 TEU, Japanese built, Post Panamax was bought for $25 million.

    And a brand new 5,000 TEU for delivery in 2014 can be bought for $44 million. Also built in Japan. (They have higher resale value)
    Feb 6, 2013. 03:43 PM | Likes Like |Link to Comment
  • Time To Sink Diana Containerships [View article]
    There shouldn't be too many surprises to earnings.
    The fourth quarter had the Centaurus charter drop by $12,500 per day, but they had the addition of the Garnet charter in November.
    There will be an increase in expenses and debt.
    It will be their outlook, if they give it.
    And they should be able to provide some indication of the charter that expires in March 2013.
    Feb 6, 2013. 11:34 AM | Likes Like |Link to Comment
  • Time To Sink Diana Containerships [View article]
    dhahn,
    This is vastly different than owning real estate.
    DCIX has 3 ships that are 23 years old and 3 that are 18 years old.
    They are reaching the end of their serviceable lives. They won't be around for a rebound in the container market.
    The 23 year olds will not be signed to long term charters. And if the charters available are not above break even they should realize their scrap value of $9 million.
    The value of the contracts made these purchases reasonable.
    But now what?
    Analyst estimates are for DCIX to make 2 cents in 2013.
    A huge amount of 10,000 TEU ships are being added to the fleet.
    And those ships have expenses that are not much more than these old 4,700 TEU ships that DCIX owns.
    A company with 10 ships is not gaining market share in this business.
    There are two sides to this sector.
    The huge companies like Mearsk that own hundreds of ships, and whose customers are the companies that want to ship a number of containers to a destination.
    And then there are companies like DCIX who lease the ships to customers who in turn use them as feeder ships.
    The Panama Canal is being expanded to accommodate the 10,000 TEU ships. And ports are being expanded to handle the larger ships also.
    At the time, DCIX bought some aging ships, that were accretive acquisitions based on the charters that could be had.
    Now, with the massive amount of tonnage being delivered. DCIX needs to tell everyone what they plan to do to make money in the new environment,
    Feb 6, 2013. 07:20 AM | Likes Like |Link to Comment
  • Time To Sink Diana Containerships [View article]

    This is from Alphaliner:

    "The container ship charter market, struggling to recover from record lows, is set to weaken further in 2013 with an overhang of excess capacity depressing vessel earnings, according to industry analyst Alphaliner.

    Average charter rates this year have risen 20 percent from their all-time low in 2009, but remain 55 percent below their long-term 20-year average (unadjusted for inflation), making 2012 the second-worst year for shipowners in the past two decades.

    The rising volume of unemployed and laid-up ships is stifling efforts to raise charter rates, Alphaliner said.

    The fleet of jobless vessels with capacity of more than 500 20-foot-equivalent units stood at 231 units with a total capacity of 820,000 TEUs at the beginning of December, including 53 that have been idle for more than six months.

    Daily charter rates are between $5,000 and $9,000 for all ship sizes below 5,000 TEUs, with vessels of 1,000-2,000 TEUs faring comparatively better than 2,000- to 5,000-TEU ships, for which rates barely cover operating costs.

    The high share of large and medium-sized ships in the 1.7 million TEUs of capacity scheduled to be delivered in 2013 will continue to exert downward pressure on rates for 2,000- to 5,000-TEU vessels, whose jobless rate has risen to 8.2 percent from 6.4 percent in August.""
    Feb 5, 2013. 02:38 PM | 1 Like Like |Link to Comment
  • Time To Sink Diana Containerships [View article]
    Instead of going off on lots of paranoid rants about "shorts driving down the stock", why don't you guys do some research?
    Have you ever looked at the fundamentals?
    Do you know what a sub 4,000 TEU Panamax is worth that was built in 1989, and1990?
    Or the ones built in 1995?
    Do you know what DCIX earnings projections are for 2013?
    Do you know when the charters expire, and what the expected rates that they will get?

    People who blame their losses on shorts, generally have no idea what they bought, or the fundamentals of the shipping sector.

    Some research:
    """There are now 161 boxships with capacity over 10,000 teu, with global volumes totalling 2m teu.
    The trend for increased scrapping in the smaller sizes looks set to continue in 2013, a view supported by containership analysts.
    Expansion of the Panama Canal, forced cascading of vessels and significant growth in larger vessel fleets suggest that the future is definitely brighter for larger containership vessels compared with the smaller sizes.
    The sluggish global economy and the need to absorb these larger ships mean that smaller vessels are suffering as they are squeezed out of service in some regions.
    The latest Lloyd’s List Intelligence figures show 318 containerships idle this week.""
    Feb 5, 2013. 02:02 PM | 1 Like Like |Link to Comment
  • Star Bulk Carriers: Get In For The Long Haul [View article]
    I don't take it personally.
    It's quite comical.
    I just find it hypocritical for the person who showed the least grasp of the facts to be the one to tell the rest of us to hold our opinions.
    You stated that shares had decreased for three quarters. That there had been no dilution. ( "opposite to the dilution" )
    And I quote:

    ""3- Company actually executing the share buyback plan: Check the outstanding shares of the last 3 quarter reports, it's decreasing every quarter which means, company is buying back it's stock - opposite to the dilution. +1"""

    You didn't do your homework, and you're trying to back out of it.

    ""Time will tell who is right or wrong, not your rhetoric""

    Just because you can't see what's going on don't assume the rest of us don't.

    It's the research, not rhetoric, that we do that helps us forecast what will happen with this company.
    The opinions you disdain are based on it. The tools are there for those willing to do the work. Fleet deployment, FFA's, Ship deliveries, and demo's. You familiar with any of that?
    It isn't by chance that the bears were right.
    It was the bulls who were emotional, as you put it.
    SBLK is half what it was when you first posted.
    And it isn't just the share price that shows we were right.

    The entire loan amendment is the result of insufficient asset values.
    And insufficient cash flows to pay bills.
    Both of which are the exact opposite of what you stated.
    Jan 23, 2013. 03:44 PM | Likes Like |Link to Comment
  • Star Bulk Carriers: Get In For The Long Haul [View article]

    Seriously??

    The guy who said that there wouldn't be a dilution.
    The guy who stated that the outstanding shares were going down.

    That guy, is lecturing us on sticking to the facts?

    This has been an interesting thread, with many contributions from posters with informed opinions.

    Yours being the notable exception.
    Jan 23, 2013. 10:13 AM | 1 Like Like |Link to Comment
  • Star Bulk Carriers: Get In For The Long Haul [View article]
    Mintz,
    When you run the numbers on those two older Capes.
    The Star Big, and Star Mega will be 20 years old when they end those charters, and they should hit the beach.
    The scrap value would be around $8 million based on current prices.
    But make sure you take out the commissions that were paid and will be paid on the buy and sell.
    And since they were financed, don't just take out Opex, take out finance charges.

    When you start planning on a time when TCE's will regain profitability, keep in mind. The TCE for the Q ending Sept. was an average $15,200, and that was not a profitable Quarter.
    Jan 19, 2013. 04:49 PM | Likes Like |Link to Comment
  • Star Bulk Carriers: Get In For The Long Haul [View article]
    Mintz,
    Opex is not the only expense to consider when you try to figure out break even.
    This is how Pareto works it out using a loan for 75% of the purchase price.
    These companies have a long way to go before thinking about a dividend.

    ""Capesizes, which averaged $7,680 daily in 2012, needed $16,400 to break even, according to Pareto Securities AS. Panamaxes, which averaged $7,684 last year, need to earn $12,000 to cover operating costs, excluding fuel, and repay loans, according to the Oslo-based investment bank.""
    Jan 19, 2013. 12:48 PM | Likes Like |Link to Comment
  • Star Bulk Carriers: Get In For The Long Haul [View article]

    "Long story short, recovery is going to take a long time"""

    I agree with this statement, but we have vastly different opinions on what constitutes a long time.
    The dry bulk sector will be lucky to get break even rates by 2015. And break even rates are different for these companies depending on their debt and age, and makeup of their fleet.
    SBLK has a wall to hit in 2016 when the deferred payments come due. They will still be trying to exist, never mind paying a dividend.
    They will again be amending their loans.
    They should also be without the services and revenue, from three of their oldest Capes.
    Anyone who thinks this overcapacity will be resolved within two years is not paying attention.
    There is not going to be some huge snap-back in demand for bulk goods. What you are missing is that seaborne trade of bulk is at historic levels now. It's climbing at a steady 4-5%.
    When Europe recovers it will be a small boost. An amount that VALE could accommodate with it's VLOC's still to be delivered.
    2013 will still have three times the amount of ships delivered, as will be demolished.
    2014 will have as many ships delivered as demolished, unless rates recover. Again, no one is going to scrap a ship under 20 years old that can still make a profit.

    The worldwide fleet was caught by surprise by the growth of China, after inclusion in the WTO. That resulted in a shortage of ships, and the resulting astronomical rates. I'm sure there will be more surprises in the future, but it's hard to believe there will be a shortage of ships to accommodate it. "Normal" rates are not going to result in a company this size having the earnings to pay a dividend in the $2-3 range.
    It will be awhile before SBLK can significantly grow it's fleet. Banks aren't throwing money at these guys like they did when rates were six figures per day.
    I have more doom and gloom, but this is already too long.
    Jan 18, 2013. 08:07 AM | 2 Likes Like |Link to Comment
  • The Devil In The Details: Eagle Bulk Shipping's Debt Restructuring [View article]

    Again, I give DSX management alot of credit for their honesty, while other CEO's have been blowing smoke. And their projections made several years ago when they suspended the dividend, have proven to be prescient.
    I really can't address why the stock would rise at this time other than they are respected as being best of breed. And have the best balance sheet. (Even adjusted for market value).
    I have been expecting a rise in the BDI based on the shipping schedule around the Chinese New Year. The lowest iron ore stockpile in two years, as well as the amount of congestion in the ports, which will have Capes sitting waiting to load and unload for weeks.
    That said, it's early for that. The deliveries out of Australia were 25% higher in December than they were in November. Also, the price of iron ore is up tremendously, while the demand for a steel is flat, and the price of steel is up 1%.
    So, all that and I've told you nothing about the stock price speculation.
    These stocks are always good for a trade if you can time it.

    Fundamentally, the four recent charters from DSX are for 18-24 months at very low rates. I would say that is in line with the sentiments in the sector.
    Jan 7, 2013. 12:27 PM | 1 Like Like |Link to Comment
  • The Devil In The Details: Eagle Bulk Shipping's Debt Restructuring [View article]
    Yeah I'm not a math pro, but I know that works out to a Debt of $25 million per ship.
    Against a resale value of $24 million for a Newbuild Supra, and $17 million for a 5 year old Supramax.
    Which is why they had to amend their loan facilities.
    No, the Banks aren't letting them sink. The banks just made sure that they will sweep all profits for the next 2 years and then the whole debt issue will have to be revisited.
    Seriously!!!
    Occasionally a ship is scrapped as young as 17 years old. But don't start trying to run the numbers assuming most ships will be.
    The net increase in the size the fleet for 2012 is over 10%, final numbers not in yet. And the projected increase for 2013 is 9%.
    Seriously, where do you get your numbers? I'll provide links if you do.
    Yes some ships and shipyards are not financed. Which is why there have been dozens of resales, John Fredricksen just picked up 10 Capes for a great deal. The vast majority of ships on order will be built and delivered to somebody.
    Worldwide demand for dry bulk goods has been climbing at a 4% rise for four years. But the net fleet growth has increased 35% over that time.

    "When over supply flips to under supply - say within 5 years and this is a possible 60 bagger""
    Under supply in five years? Good luck with that. Yes shipping is cyclical. There are another 1200 ships ordered for 2013, and 300 for 2014. People who don't really follow the sector have been saying for four years that ships won't get built. They've been dead wrong.
    EGLE has two more years of just trying to stay above water, and you think they will have a market cap of $2.4 billion in five years?
    DRYS management is horrendous, but they have 65% of ORIG stock to use as a semi-liquid asset. EGLE's assets are worth less than their debt, hence the term "breach of loan covenants".

    What fleet deployment page are you looking at?
    EGLE has 2 charters that extend to Dec. 2014. All the rest are much shorter. And they aren't very good.
    Those charters for $17,000 per day plus a percentage of anything above the BSI were with Korea Lines. They went Bankrupt.
    There will be an improvement in shipping, gradually. And while waiting for it to improve, these companies have made reverse splits, dilutions, and other shareholder unfriendly moves to survive, and will continue to do so as ship values continue to fall.
    Yes, RBS have experts who worked out a deal to make sure "they get theirs", and management gets theirs, and shareholders get to hope and pray there is something left for them.
    Jan 7, 2013. 08:29 AM | Likes Like |Link to Comment
  • Which Dry Bulk Shipping Stocks To Buy On A 'Rebound' In The Iron Ore Demand? [View article]
    Show us a link.

    There's been a lot of speculation as to what Vale will do. Including selling the ships to Chinese companies. But not canceling the ships.
    Enough have already been built, and the others are under construction.
    http://bit.ly/Wkwsbb

    The ban is definitely hurting Vale, but they are still transfering ore in Subic Bay and then delivering into China from there.
    They also use the Valemax to deliver into Japan, Oman, Rotterdam, and Italy.
    China isn't Vales only customer. Just the biggest.
    Before 2007, vale only shipped 25% of it's ore to China.

    South Korean companies own 16 of the big ships that are leased to Vale. South Korea uses a lot of ore.
    The issue is about Vale, the largest iron ore miner in the world owning the ships. And COSCO, the largest shipowner in China doesn't like the conflict of interest.
    But the Chinese steel mills want the ships, it saves them money.
    And half of the ships are being built in China, whose shipbuilders are struggling with not enough orders.
    So the situation will be resolved.
    Building these ships has not worked out well at all for Vale. But it doesn't mean they are going to scrap them.
    Those "white elephants" will continue to be a major part of the glut for years to come.
    Jan 5, 2013. 01:05 PM | 3 Likes Like |Link to Comment
  • Star Bulk Announces Agreements With All of Its Lenders to Defer Up to Approximately $24 Million of Its Principal Repayment Obligations for Years 2013 and 2014, Reclassify $7 Million of Restricted Cash to Free Cash and Waive Certain Financial Covenants [View article]

    The costs of kicking the can down the road on debt payments is:

    Higher interest rates on the loans.
    A cash sweep by the banks twice per year of any profits left after expenses.
    A requirement to raise $30 million in equity within the year. Most likely through dilution of common shares.
    Possibly through preferred shares.

    SBLK is also required to sign up 10 third party ships under a management agreement.
    One ship owned by a director has been signed up.
    Jan 3, 2013. 11:22 AM | Likes Like |Link to Comment
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