Singapore Shipping Corp

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Quote:I assume that in the event of a sinking, the ship operator (SSC in this case) will claim from insurance. Can the charterer impose any penalty on SSC if it cannot find another vessel to fulfill the charter?

AFAIK, It depends. When under a timecharter, the ship owner maintains ownership of the vessel and its crew. The charterer takes control of the voyages that the vessel sails.

If the sinking is due the the crew being drunk on the watch, then ship owner bears the costs. Charterparties (the contract) usually will stipulate that the ship owner has to supply another equivalent vessel in the event that the original vessel is unavailable.

If the sinking is because the charterer orders the crew to sail through treacherous weather or dangerous waters, against best practices, then the charterer will bear the costs.

Quote:That would mean that SSC will not benefit from the current drop in oil prices. As in, we cannot expect any decrease in the "Vessel operation and crew management costs".

SSC's revenue from the timecharter is fixed. Its main operational costs are maintenance and crew. They will not benefit from the drop in fuel price. The charterer will benefit from the drop in fuel price since they are the ones who pay in the timecharter. Unlike retail automobile fuel, bunker prices adjust very quickly in accordance with crude oil prices. But:

voyage revenue - voyage costs (including cost of charter and fuel) = net voyage result

If voyage revenue drops in line with the drop in cost of fuel such that voyage result is the same, the only benefit charterers will get from falling fuel prices is a reduction in working capital requirements. Last year saw the collapse in many commodities' prices and the baltic dry index has collapsed back to close to multi-year lows. So can charterers really benefit from falling prices?

Which ones can and which ones cannot?
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Hi D123, thanks a lot for sharing your thoughts!

(19-01-2015, 11:17 PM)D123 Wrote: If voyage revenue drops in line with the drop in cost of fuel such that voyage result is the same, the only benefit charterers will get from falling fuel prices is a reduction in working capital requirements. Last year saw the collapse in many commodities' prices and the baltic dry index has collapsed back to close to multi-year lows. So can charterers really benefit from falling prices?

Which ones can and which ones cannot?

Since SSC only owns RORO vessels, and the sales of vehicles should not correlate strongly with commodities prices, I would imagine that SSC's charterers stand to gain. (At least, for the voyages handled by SSC)
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Results are finally out -

http://infopub.sgx.com/FileOpen/THIRD%20...eID=334539 [3Q 2015 Results]

Results exceeded my expectations with core net profit of over US$2.5 million (after accounting for $0.4 million exchange gain) in 3Q 2015. This marks the first full quarter contribution from MV Capricornus purchased for US$16.5 million and delivered in Sept 2014. Judging by the EBIT margins and asset yield, this is looking to be a shrewd acquisition. The annualized results works out to over US$10 million. In 4Q 2015, the US$16.5 million MV Centaurus and the US$80 million vessel will be delivered so the full year contribution in 2016 should be substantially larger. Financing of MV Centaurus has been finalized though there is no news on the charter term and financing of the newbuild vessel yet. The gearing is presently low but it will spike up in the coming months. However, with 4 vessels on 15 year fixed rate charters, loan repayment and dividend payouts can easily be financed from internal resources. I am quietly confident of its prospects this year and hope for higher dividends once all the vessels have been delivered.

(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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Earnings of 4cts SGD in 1 year is no problem with the new ships coming on stream. At 7.2X PE it's a reasonably priced stock with stable earnings.

Question is how much cash payout company will give... grow fleet or reduce debt.
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Touching 30c this morning, a level that have not been seen for the past 5 years. Congrats to those who have vested.
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It is easily worth 35 cts upwards... be patient and enjoy the ride.
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Slow and steady ascent :-) Wait for end May results to show... Patience...

Wonder where the buying come from :-)
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Some accumulation in the shipping sector. High vol in Samudera too. Maybe a broking house gonna come out a bullish report on the sector


(10-03-2015, 01:05 PM)Contrarian Wrote: Slow and steady ascent :-) Wait for end May results to show... Patience...

Wonder where the buying come from :-)
You can find more of my postings in http://investideas.net/forum/
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Singapore, 10 March 2015 –Singapore Exchange Mainboard-listed Singapore Shipping Corporation Limited (“SSCL”) announces its entry into a term loan facility of up to US$77million (“Term Loan”) with a leading Japanese financial institution.

The Term Loan will be used to finance the acquisition of a Pure Car Truck Carrier (“PCTC”) vessel. Upon its delivery in March 2015, the vessel will be chartered to a blue chip shipping major.

US$80M new ship. Borrow up to US$77M. 95% financing.

So generous financing for a ship? Must be Jap bank very desperate...




(10-03-2015, 01:10 PM)Behappyalways Wrote: Some accumulation in the shipping sector. High vol in Samudera too. Maybe a broking house gonna come out a bullish report on the sector


(10-03-2015, 01:05 PM)Contrarian Wrote: Slow and steady ascent :-) Wait for end May results to show... Patience...

Wonder where the buying come from :-)
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(30-11-2014, 01:11 PM)Boon Wrote:
(29-11-2014, 07:41 PM)learner88 Wrote: It's here as well.

http://www.singaporeshipping.com.sg/ship-owning.html

Vessel Capacity Built
Boheme 7,200 cars 1999
Sirius Leader 5,190 cars 2011
Cougar Ace 5,540 cars 1993
Capricornus Leader 5,415 cars 2004
Centaurus Leader 5,427 cars 2004
New Build 7,000 cars Delivery in Mar 2015

Sirius - presumably owned by 100% subsidiary company: SSC Sirius Leader Pte. Ltd – was paid in cash.

Boheme - presumably owned by 100% subsidiary company: SSC Boheme Pte. Ltd - has been mortgaged as security to secure bank borrowing

Capricornus – owned by Ow Brothers Pte. Ltd. - was paid entirely in cash
https://www.classnk.or.jp/register/regsh...mo=9283863

There was only USD 3.197 million cash left as at 31-Sept-2014.

With Centaurus now delivered and the expected delivery of the new vessel in March 2015 - unless Sirius, Capricornus & Boheme are mortgaged/re-mortgaged to secure more borrowing as I have previously outlined - it looks like these two purchases (USD 96.5 million worth), especially the new vessel, would almost entirely be funded with debt - with LTV ratio probably exceeding 95%.

USD 80 million for a new 7,000 cars capacity vessel looks expensive to me - considering that Ocean Yield ordered 2 x 8500 cars vessels to be delivered in 2016 for USD 137 million - may be that's the trade-off for near 100% leverage - hire purchase with zero or little up front payment - pure speculation on my part - ha-ha !

As a common practice, the new ship would likely be strucured to be owned by a one-ship subsidiary company of SSC- whether there will be any sister-ship-mortgage involved in the financing remains to be seen.

For the new vessel: Purchase price looks high, financing cost is still an unknown - all in, it still could be a good deal if the chartered rate is high - have to wait and see.

(vested)

Made in Japan vessel is more expensive but it could be a hire purchase package deal !

USD 3.0 million equity + USD 77 million debt to buy one USD 80 million vessel - if it is a win-win deal for all - why not !

(vested)
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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