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  • Upgrading DryShips To Neutral From A Sell  [View article]
    "but I don't know how critical we can really be of the guy considering the rest of the shipping companies have not done any better than DRYS. """

    Faint praise indeed.
    And DSX and Navios are in far better shape than DRYS.
    DRYS shareholders lost more on a dollar basis, and a percentage basis, and they were diluted far more than any other bulker.
    Before the ORIG purchase, DRYS had 47 ships, $138 million in cash, $1.3 billion in debt, and only 36 million shares outstanding.

    Now you have 47 dry bulk ships, after the newbuilds are delivered, some Tankers that are barely worth the debt held against them, and a 65% interest in ORIG which I suppose you can put a dollar figure on if you use their market cap.
    And you've got over 380 million shares outstanding.
    Aug 25, 2012. 01:30 PM | Likes Like |Link to Comment
  • Upgrading DryShips To Neutral From A Sell  [View article]
    Mintz, it would take me hours to refute this:

    ""If he had skipped the few insider deals that net him what... $10-20M total?""

    Let's just take the failed deal in 2008. The one where DRYS was going to buy four Panamax from Cardiff George for $400 million.
    Six months later the deal was cancelled, and Cardiff kept the $55 million deposit. Then DRYS paid Cardiff $105 million for a purchase option on those same four Panamax, and the option expired without DRYS getting the ships.
    Then there was the nine Capesize deal between DRYS and Cardiff, which was cancelled, and Cardiff kept millions of shares of DRYS as compensation.

    More recently, (as if the whole OCNF wasn't enough of an Economou family ripoff.) Cardiff kept a $6 million penalty for "change of control" in the DRYS merger with OCNF. But there wasn't really a change of control. Cardiff managed OCNF ships before and after the merger. The penalty should have been waived.

    And in the latest ORIG earnings report. Vivid Finance received $6 million in commissions for six months. That's a consulting fee for helping ORIG secure insurance, arranging financing, and of all things, losing $11 million in interest rate swaps.
    ORIG shareholders don't pay Vivid for that service to ORIG, DRYS shareholders pay for that.
    And Vivid Finance is owned 100% by George Economou.

    By the way, Anthony Kandylidis, the former CEO of OCNF, and nephew of George, just got hired by ORIG to be a consultant.
    His pay is $1.1 million per year, plus a $1.5 million signing bonus.

    I can go on for hours, but I think you get the point.
    Aug 25, 2012. 12:57 PM | Likes Like |Link to Comment
  • Upgrading DryShips To Neutral From A Sell  [View article]
    There is always confusion here because of the consolidated earnings, and also balance sheet listed on DRYS earnings. It includes ORIG numbers with DRYS.

    The total debt listed on the latest DRYS consolidated ER, was $4.7 billion including current liability, and long term liability and other liability. Take out the $500 million in other liability, and you have the same as Google..
    While the separate ER for ORIG was $2.6 Billion.

    Shareholder equity was also listed in the consolidated balance sheet as $4.055 Billion, While the ORIG shareholder equity is listed as $2.965 Billion. Slightly ove a billion, not slightly less.
    Aug 25, 2012. 12:33 PM | Likes Like |Link to Comment
  • Upgrading DryShips To Neutral From A Sell  [View article]
    The author was referring to this comment from an analyst.
    And George made reference to the fact that some banks have dropped out of the ship finance business altogether.
    I merely refer to the author's assertion that it would be a "major positive".

    ""Currently, DRYS has $463.5 million of capex remaining on its dry bulk fleet, but we would expect the company's two unfinanced VLOC's to be the top restructuring or sale candidates," Deutsche Bank analyst Justin Yagerman wrote in a note to clients.

    These vessels account for $95 million of capex in 2012 and 2013. Additionally, the two Capes set for delivery later this year which require an additional $81.2 million in financing.""
    Aug 25, 2012. 03:36 AM | Likes Like |Link to Comment
  • Upgrading DryShips To Neutral From A Sell  [View article]
    If they sell the two unfinished VLOC's or two new Capes, it will be because the Banks won't finance them. The Banks won't finance over 100% of the value of the ships.

    There is nothing positive at all about the sale of these ships, it is pure desperation.
    DRYS loses money on the deal either way.
    The deposits they already made on the ships.
    And the fact that even if they are paid current market value of the ships, they will still have to come up with more cash to pay the shipyards.
    Brand new, fresh out of the shipyard Capes go for $39.5 million.
    But don't wait too long, they are still going lower.
    Aug 24, 2012. 03:42 AM | Likes Like |Link to Comment
  • Upgrading DryShips To Neutral From A Sell  [View article]


    Over the last three weeks there were 15 reported sales of dry bulk ships to be used for further trading.
    Six were built in 2012.
    Two were built in 2010.
    Six were less than 15 years old.

    Another eleven older ships were sold for scrap.

    It would be very easy to pick new, efficient ships that are available cheap from shipyards or other companies that can't get financing.
    The recent purchase by Diana is a good example. A brand new Post Panamax for $25 million.
    And they will continue to do more over the next year.
    Aug 23, 2012. 02:27 PM | Likes Like |Link to Comment
  • The Devil In The Details: Eagle Bulk Shipping's Debt Restructuring  [View article]
    Very nice job Lambros.
    Where have you been??
    The last time I heard the latest details of the arrangement made with the failed charters to Korea Lines, was that EGLE took the ships back and rechartered them. And Korea Lines would then make up the difference between that amount, and the $17,500 per day that was on the original charter.
    I would assume that EGLE will never see that money.

    And do you mind if I tease you a bit about the last part of your name: Papa "economou" ??
    Love to read your commentary on George.

    Aug 22, 2012. 04:45 PM | Likes Like |Link to Comment
  • Dryships Is On Sale For A Limited Time  [View article]
    DRYS turned $336 million in revenue into a per share loss.

    I would hope that would put an end to all the pumpers who proclaim the magnificence of the multi billion dollar backlog, without having the slightest clues as to where that revenue goes.
    Aug 17, 2012. 08:43 PM | Likes Like |Link to Comment
  • Diana Shipping Will Benefit From Shipping Market Chaos  [View article]
    DSX has always maintained that they intend to use their cash and debt to purchase distressed assets when the price is right.
    And they reiterated that intent when questioned about a return of the dividend, or any other questions about their cash.
    As to who else is in a position to buy discounted ships?
    There have been several dozen ships sold on the second hand market over the last month.
    Including ships built in 2012 and due in 2013.
    The buyers are listed as South Korean, Turkish, Greek, UK, Brazil, and Polish.
    There are no barriers to entry here.
    Anyone with cash and good credit can load up on new ships over the next couple of years, hopefully with delayed delivery, and then pay a 5% commission to any number of reputable ship managers, and just like that, You're a shipping Tycoon.
    Aug 16, 2012. 06:17 PM | 1 Like Like |Link to Comment
  • Diana Shipping Will Benefit From Shipping Market Chaos  [View article]
    Some things to consider when talking about scrapping.
    Ship breakers need credit too.
    When financing gets tight for shippers, it also gets tight for ship breakers.
    I'll try to find the link, but there is a limited amount of bulk ships left in the world that were built in the 1980's. Or even the early 1990's.
    Scrapping anything newer, before it's fifth special survey, is a sacrifice that few would be willing to make.
    It's quite likely that they would scrap the ship for $7 million, and still have to come up with another $7 million cash to pay off the mortgage.
    So, if rates perk up to just above break even, none of these companies are going to sell a 15-20 year old ship for scrap, that can still earn it's keep.
    As much as it would hurt in the short run, what the sector needs is a solid year of dismal rates to clear out the older tonnage.
    And they may get that.
    Aug 16, 2012. 05:47 PM | 2 Likes Like |Link to Comment
  • Diana Shipping Will Benefit From Shipping Market Chaos  [View article]
    The latest report from BIMCO, on deliveries and scrapping.

    Another 20 million DWT have been delivered over the course of the previous two months from the busy shipbuilders in China, South Korea and Japan. This brings the total year-to-date deliveries up to 67.5 million DWT, equal to the total dry bulk deliveries during the three years of 2004-2006. This means that the active fleet has grown by 8.0% since the turn of the year.
    Fortunately the ship breakers in India, Bangladesh and China have also been busy bees. Weighing against the inflow of newly built ships is the 18.3 million DWT of demolished tonnage that has left the sea. Capesizes and Panamax vessels are responsible for the lion’s share of this with 11.6 million DWT.

    The Panamax segment seems to follow in the footsteps of the Capesize segment, with a huge influx of new vessels in the first seven months of 2012. The order book reveals that another 24.5 million DWT are scheduled to be delivered in the last five months of this year – and yet another 23.9 million DWT in 2013. BIMCO does not expect the entire orderbook to be built on time – historical data shows that only around 65-70 % of the scheduled orderbook is delivered at the end of the year according to plan. We expect that 15.5% of the Panamax fleet will be less than a year old at the end of 2012. This puts mounting pressure on owners to postpone deliveries or even better, to try cancellation of orders if possible. Keeping supply growth as low as possible will improve market conditions. The problem is illustrated quite clearly by earnings, which have plummeted to such an extent that the Baltic Panamax TCE average in the first six months of 2012 (USD 8,792 per day) approximates the six months following the dawn of the financial crisis in October 2008 (USD 8,663 per day).
    Aug 16, 2012. 04:46 PM | 4 Likes Like |Link to Comment
  • Diana Shipping Will Benefit From Shipping Market Chaos  [View article]
    Nice job Mintz.
    Save some dry powder though!
    Aug 15, 2012. 12:38 PM | 1 Like Like |Link to Comment
  • Drybulk Shipping: Normalizing Proportional Risk To Determine Asset Quality  [View article]
    It's not hostility.
    More like frustration. Thinking outside the box is one thing, but a denial of shipping fundamentals is tough to argue with.
    And there's nothing wrong with conjecture, but you have done way too little research to be asserting your theories as fact.
    You insist that the BDI must return to it's historical average, and soon. How about the fact that never in the history of the BDI has there been such an unprecedented build out of new ships.
    And do you even know that a BDI of 1300 would yield rates that are quite poor. And still well below the expiring legacy charters.
    or that the shipping sector, being cyclical, has a historical PE of 7?

    The fact that the BDI has been volatile doesn't negate my statement that the shipping glut will take years to work off.
    The longer term charters, which DSX uses, have shown a much steadier, consistent decline. And so have the ship values. The rise of the BDI in November was the result of pre stocking of iron ore before the Chinese New Year, and a lack of available tonnage in the Pacific.
    And the precipitous decline in Jan. and Feb, was the result of steel companies shutting down for the holidays. Seasonal demand for Grains, and Fertilizer, can give the BDI a short term boost, but again not relief from the overcapacity.

    And this absurd theory you have that Diana is "purposely depressing charter rates".
    Where do you get this stuff?
    Simeon Palios is not foolish enough to cut off his nose to spite his face. He will get the best rates he can for the company.
    And what possible way would lowballing rates bring a competitive advantage?
    It wouldn't pressure anyone else.
    Diana has 30 ships, a small company among the US listed companies. And a minuscule gnat when compared to the worldwide fleet.
    And you think Palios is trying to put pressure on companies with 400 ships under control?
    By signing a few cheap charters out of the thousands of charters each year?
    Aug 11, 2012. 10:03 AM | 1 Like Like |Link to Comment
  • Drybulk Shipping: Normalizing Proportional Risk To Determine Asset Quality  [View article]
    I know the history of the BDI.
    And it has changed from being an index reflecting 13 routes, with ships that had nothing bigger than 120,000 dwt.
    And no supramax segment.
    Now the routes have changed, and there are 23 of them.
    The age of the ships included have changed, and the multiplier has changed.
    So using an average over 15, or 30 years is not going to lead you to what's "normal".

    And I know what chokepoints are. What I don't get is your "capacity cap'.
    That's why i asked you if you were referring to the Panama Canal. But chokepoints are most often used when referring to tankers, not bulk.
    Because, unlike oil, the vast majority of the dry bulk trade is iron ore and met coal, and thermal coal, being shipped from Australia, Brazil, Indonesia, South Africa, and India. And delivered to China, Japan, Korea and again india.
    No chokepoints there.

    In fact I've been reading the shipping trade papers, analysts, and reports, for six years. They report anything they find pertinent to the shipping trade. There were some references in 2008 to the number of ships waiting to go through the Panama Canal had reached 100.
    Which delayed the ships by 26 hours in their voyage.
    The trade papers do however make reference to Port Congestion on a weekly basis. It is considered a major contributing factor to rates.
    Because a 100 ship queue causes a three week delay in the voyage.
    But you dismiss that.

    Sure, eventually the BDI will return to normal, or at least profitable. But next year is going to be horrible, especially for Panamax.
    We are only 56% through the order book. By the time it's done, the fleet will have doubled from the 2007 shipping boom. And those ships are going to be working for 20 years. The shipping glut will take years to work off.
    So what makes investing in companies in survival mode so attractive?
    Never mind, I don't want to know. It's your money.

    BRS is a great source:
    You need a subscription for this but some news is free:
    Aug 7, 2012. 06:13 PM | Likes Like |Link to Comment
  • Drybulk Shipping: Normalizing Proportional Risk To Determine Asset Quality  [View article]
    """ i HOPE ship builds are suspended because it should lead to a faster recovery for the market. at the same time, the reluctance of highly leveraged companies to back out of builds again suggests that today's BDI is undervalued.""""

    Actually the cancellations just end up being finished by the shipyard and resold, leading to great deals like the one DSX just got on the post panamax.

    The reluctance of any company to backing out of a newbuild deal, is because of the rather large deposit they placed when the ship was ordered, and the other payments made during the building process.
    And the price on that panamax suggests that better rates are not coming any time soon.

    You're going to have to explain how the BDI can be considered "undervalued".
    What value?
    It's a Time Charter Equivalent rate average of the charter rates paid to shippers over a selected few routes. It is a fair indication of the demand for ships and the oversupply of ships.
    And the BDI is going to hover around the barely break even point for a few more years.

    And what does this mean?
    """the regions in which these ships operate creates a natural capacity cap. choke points mean only x amount of ships can pass a day."""

    The Panama Canal? Inconsequential.
    The only choke points are the ports themselves. Having ships sitting outside of ports in queue, waiting to load or unload has at times caused temporary ship shortages.
    The ports of Qingdao, and Newcastle, each had over 100 ships sitting, waiting to unload and load.
    And ports are being expanded , and new ones being built, all because of the logistic issues in 2007.
    There are no shortages now, and it will be a long time before rates climb because of a lack of ships.
    And yes, more are ordered just about every day.
    Aug 6, 2012. 06:44 PM | Likes Like |Link to Comment