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Nothing unexpected here. Container shipping has been weak for years. And most of their charters are expiring in 2015 - 2016.
The next thing to look out for will be whether they can extend the LTV waiver expiring in Dec 2015.
(Not Vested)
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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I didn't have a look at their last few quarters results, but with the aggressive debt repayments over the years, thought the LTV waiver is no longer required now?
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(05-11-2015, 06:22 PM)valuebuddies Wrote: Half of their fleets would be affected with lower charter rates starting next year, but let's just assumed that their revenue would be cut for 50%. So if we also draw a 50% mark on its share price 1 year ago, we should derived at about 14c. Though it is still highly leveraged, the current financial position is much better than few years back.
For me I think it's time to re-look into it again if happen to see it drop to 10c, where paying 15c for something worth a dollar in book.
The valuation of Rickmers Trust is on its cashflow generation and ability to repay debts.
For the past 3Q, revenue and cash receipts from customers was 84m. Cash aid to supplier and trust manager has been constant at 31m. For the past 3Q, (ignoring dividends paid and interest paid on interest swaps), Rickmers generated 5 mil of cash.
Lets make a hypothetical scenario of only a 40% decrease in revenue from 84m. What happens is that rickmers will be cashflow negative by 28 mil (in 9 months), annualisng it, Rickermers will burn 36 Mil of cash.
Furthermore, Rickmers has a US $80 mil note expiring in 2017. If situation persists, I do not know how Rickmers will redeem the notes amid the times when it becomes cash flow negative.
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(08-11-2015, 04:33 PM)CY09 Wrote: (05-11-2015, 06:22 PM)valuebuddies Wrote: Half of their fleets would be affected with lower charter rates starting next year, but let's just assumed that their revenue would be cut for 50%. So if we also draw a 50% mark on its share price 1 year ago, we should derived at about 14c. Though it is still highly leveraged, the current financial position is much better than few years back.
For me I think it's time to re-look into it again if happen to see it drop to 10c, where paying 15c for something worth a dollar in book.
The valuation of Rickmers Trust is on its cashflow generation and ability to repay debts.
For the past 3Q, revenue and cash receipts from customers was 84m. Cash aid to supplier and trust manager has been constant at 31m. For the past 3Q, (ignoring dividends paid and interest paid on interest swaps), Rickmers generated 5 mil of cash.
Lets make a hypothetical scenario of only a 40% decrease in revenue from 84m. What happens is that rickmers will be cashflow negative by 28 mil (in 9 months), annualisng it, Rickermers will burn 36 Mil of cash.
Furthermore, Rickmers has a US $80 mil note expiring in 2017. If situation persists, I do not know how Rickmers will redeem the notes amid the times when it becomes cash flow negative.
If LTV waiver is not required, the loan repayment schedule might not be that agreesive anymore. Separately, it is not a bad choice to disposed those vacant vessels even though at less than half of the book value. Lastly if Rickers really facing severe cash flow issue, I think the parent company would step in to help, as what we have witnessed in the past.
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Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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20-02-2016, 12:41 PM
(This post was last modified: 20-02-2016, 12:45 PM by CY09.
Edit Reason: Edits
)
Rickmers latest quarter shows its cash generation from vessels is barely enough to continue with debt repayments + interest. With 4 more ships whose charter rate are above US $12,000 expiring (which means reverting to rates of US $5,900), it is likely Rickmers full year cash flow will barely cover the debt repayment of 44 mil and interest; let alone prepare them to have sufficient cash to redeem its s$100mil bonds due in May 17.
Perhaps its time for Rickmers to prepare scrapping/selling their vessels to tide over the crisis.
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Agreed.
The Japanese MOL is worthy for being man of their words for sticking on to the charter for the 5 vessels which were locked in at historical high rates. But these will be maturing soon and the outlook will be gloomy for Rickmers.
http://rickmers.listedcompany.com/newsro...6VS4.3.pdf
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05-08-2016, 11:42 PM
(This post was last modified: 05-08-2016, 11:43 PM by CY09.
Edit Reason: edits
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http://infopub.sgx.com/FileOpen/Announce...eID=415851
Dosent bode well for the trust as it has to repay 2 tranches of bank loans to 2 different syndicates by mid 2017 - HSH Syndicate (179.7mil) and BNP Syndicate (about 100 mil). In addition, Rickmers medium term note of 74 mil is due in May 17.
From Rickermer's cash flow generation ability, they are only able to produce 34 mil annually. With cash of 23 mil left, Rickmers is definitely unable to redeem its medium term note, let alone repay the 2 syndicates. It is worth noting that HSH syndicate comprises of DBS as well and likely have about S$100 mil exposure to Rickmers. Rickmers will definitely dispose off some of its vessels to recoup much needed cash
Right now, Rickmers will have to really hope the banks'roll over all of their syndicated loans. Otherwise, Judicial management is its best bet.
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(05-08-2016, 11:42 PM)CY09 Wrote: Right now, Rickmers will have to really hope the banks'roll over all of their syndicated loans. Otherwise, Judicial management is its best bet.
The future looks brighter.
Demand and supply looking better. No. Of vessels going down with Rickmers vessels about 10yrs old. Some life left here especially with little new build.
Vessels taking spot are upside bets.
Vessels with long term charterer securred years back are down side.
A Trust that failed it purpose but currently look the best since creation. Price and management of liabilities.
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06-08-2016, 09:44 PM
(This post was last modified: 06-08-2016, 09:45 PM by money.)
Very terrible balance sheet. i hold this view 2 years ago, i still hold this view now. This trust will probably pay out little or no dividends for the next few years because the banks are hard on them... And worse of all, their current operating cash flow is not enough to make the bank debt repayment quarter after quarter. 6 months ago, the group has 45m cash, now 23m left, haha, at this rate, 6 months later, nothing left. Then they will proceed to do a rights issue... take $$ from shareholders again, then pretend to pay out some miserable dividend to shareholders to appease them
Not worth the bet
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