Singapore Shipping Corp

[learner88]

As we enter April, the towkay once again demonstrates that you (minorities) don't need to know, just trust me. It is a little offputting but what can we do?

https://www.youtube.com/watch?v=kCJkmlrf-ok


TAURUS LEADER
<No Previous Names>
DNV GL ID: 33732
Operational Status: In Operation

IMO No: 9700550
Class Relation: In DNV GL Class

Flag: Singapore
Port: SINGAPORE

Signal Letters: 9V3259

Owner: SSC TAURUS 2015 (7000) PTE. LTD.
Manager: SSC Ship Management Pte. Ltd.

Yard: Shin Kurushima Dockyard Co., Ltd. (5820)
Type: 345 - Vehicle Carrier
Year of Build: 2015
DWT: 19,278

[greengiraffe]

SSC on growth path...

CEO, Mr Ow Yew Heng said: “The appointment reflects the Board’s faith and trust in the current team of key managers. The new management team is strongly committed to our mission to double our current fleet size over the next two to three years and scale greater heights.”

http://infopub.sgx.com/FileOpen/SSC%20Pr...eID=352428

Appointment of Chief Executive Officer and Deputy Chief Executive Officer
SINGAPORE, Tuesday, 19 May 2015 – Singapore Shipping Corporation Limited (“SSC”) is pleased to announce the appointment of Mr Ow Yew Heng as Chief Executive Officer and Ms Chua Siew Hwi as Deputy CEO.
The appointment marks the culmination of a year of intensive selection, performance evaluation and Board deliberation, as part of the Group’s succession planning.
As CEO, Mr Ow Yew Heng will be responsible for the overall management of SSC and its group of companies. Ms Chua Siew Hwi, who is also the Group CFO, will deputise the CEO to ensure the overall effective running of the SSC’s business. The appointment takes immediate effect.
CEO, Mr Ow Yew Heng said: “The appointment reflects the Board’s faith and trust in the current team of key managers. The new management team is strongly committed to our mission to double our current fleet size over the next two to three years and scale greater heights.”

[Nick]

This might imply that the dividends will not be raised in the coming years as cash will be retained for fleet expansion. I am keen to see if the Management team is able to pull off a slew of deals in the coming years to increase their exposure to other players in the car carrier market. At the moment, their wholly owned fleet has only 2 customers.

Market seems to like this news with share price trading at 34.0 cents. Results should be out this week and hopefully we get to see how big a contribution Taurus Leader and Centaurus will have on the bottom line. Capricornus Leader seems to be generating EBIT margin exceeding 50% based on 3Q results.

(Vested)

[Boon]

Vessel Capacity
Boheme =7,200 cars
Sirius Leader = 5,190 cars
Cougar Ace = 5,540 cars (30% = 1662 cars)
Capricornus Leader = 5,415 cars
Centaurus Leader = 5,427 cars
Taurus Leader = 7,000
Total capacity = 31,894 cars

To roughly double the fleet capacity => SSC needs to buy 4 to 5 more vessels with about 7,000 cars capacity.

If all future deals could be structured in exactly the same way as Taurus Leader - with only USD 3 million of equity needed for each vessel – then total equity needed is only about USD 12 to 15 million………ha-ha!

(vested)

[Nick]

Vessel Capacity
Boheme =7,200 cars
Sirius Leader = 5,190 cars
Cougar Ace = 5,540 cars (30% = 1662 cars)
Capricornus Leader = 5,415 cars
Centaurus Leader = 5,427 cars
Taurus Leader = 7,000
Total capacity = 31,894 cars

To roughly double the fleet capacity => SSC needs to buy 4 to 5 more vessels with about 7,000 cars capacity.

If all future deals could be structured in exactly the same way as Taurus Leader - with only USD 3 million of equity needed for each vessel – then total equity needed is only about USD 12 to 15 million………ha-ha!

(vested)

Our debt to equity will be over 400% !

[Boon]

As a common practice, Taurus Leader is likely to have been structured to be owned by a one-ship subsidiary company of SSC- if there is no other corporate guarantee or any sister-ship-mortgage involved in the financing, the equity to debt ratio of the one-ship subsidiary company would be even higher at about 3 : 77 or around 2500% - which is 6.25 x 400%.

[Nick]

As a common practice, Taurus Leader is likely to have been structured to be owned by a one-ship subsidiary company of SSC- if there is no other corporate guarantee or any sister-ship-mortgage involved in the financing, the equity to debt ratio of the one-ship subsidiary company would be even higher at about 3 : 77 or around 2500% - which is 6.25 x 400%.

Haha indeed. Though I must caution, the hardest part isn't acquiring vessels or even loans to finance the acquisition. The true test of their ability to expand lies in securing long term charters with reputable blue chip clients. That will be the bottleneck in any expansion.

[Boon]

FY2015 results is out.

http://infopub.sgx.com/FileOpen/FULL%20Y...eID=352660

Revenue (USD million)
FY2014 = 34.446
FY2015 = 35.126

NPAT (USD million)
FY2014 = 8.558
FY2015 = 9.310

EPS
FY2014 = USD 2.0 cents
FY2015 = USD 2.1 cents

DPS
FY2014 = SGD 1.0 cent
FY2015 = SGD 1.0 cent

Ship Owning : 4Q 2015 result (USD million)
4Q2015 Revenue = 6.763 (Annualized = 27 million)
4Q2015 Profit = 1.985 (Annualized = 8 million or USD 1.8 cents per share)
(Note: have to wait for 1Q2016 result for the full quarterly revenue/profit contribution from Taurus Leader and Centaurus)

The Group delivered a satisfactory set of results for FY2015.
With the delivery of 3 vessels and their long-term charters to a reputable shipping major in the second half of FY2015, the Group has a secure base of recurring income, and in doing so, provided a growth trajectory for the next decade if not longer. While our business model is profitable, agency and logistics segment will continue to face earnings pressure in the current environment.
Barring any unforeseen circumstances, the Group expects FY2016 to perform better.

[greengiraffe]

http://infopub.sgx.com/Apps?A=COW_CorpAn...uddies.com

Ow's daughter appointed as Treasury Manager... new position I supposed... more overheads for SSC? Seems like overheads grew over the last 2 days with successive appointments of key personnels...

[ngcheeki]

Report from L&T this morning.

Singapore Shipping Corp ($0.34, unchanged) 4Q to Mar’15 profit excluding
year ago’s one-time disposal gain of US$936,000 surged 92% to US$2.7mln
on the back of 28% yoy rise in sales to US$10.4mln, coming in above
expectations. As a result, full year to Mar’15 operating profit (excluding last
year’s one-time disposal gain) rose 22% to US$9.3mln.
The robust performance reflects additional contributions from 2 additional
RoRo specialized fleet of Pure Car and Truck Carriers (PCTC) that was delivered
in Aug and Nov 2014. Both sister vessels are 10 years old and increased SSC’s
PCTC vessel fleet from 2.3 to 4.3 vessels and total carrying capacity from
14,052 to 24,894 cars, representing a growth of 77% yoy.
The 2 additional vessels helped propel the ship-owning division sales by 63%
yoy to US$6.7mln and profit by 53% to US$1.9mln. Also helping bottomline
was the agency and logistics business segment which saw profit surging
135% yoy to US$0.8mln due to improved operating effi ciency and economies
of scale. This signals a strong turnaround from the past year’s declining profit
trend due to margin pressures.
Amidst the uncertain macro climate and recent slew of disappointing
results and outlook from numerous companies in Singapore, we find SSC
management’s confidence in their outlook comforting. Management
expects to not only perform better in the year ahead but with the complete
delivery of 3 additional vessels backed by 10-15 years of long-term charters
to reputable customers such as Mitsui OSK Lines, Nippon Yusheng Kabushiki
Kaisha and Wallennius Lines AB they are in fact expecting to provide a secure
base of recurring income and growth for the next 10 years or even longer.
SSC took delivery of Capricornus Leader (5,415 PCTC carrier in Sept’14),
Centaurus Leader (5,427 PCTC carrier in Jan’15) and fi nally the brand new
US$80mln Taurus Leader (7,000 PCTC carrier in Mar’15), raising their total
fleet from 2.3 to 5.3 and total carrying capacity from 14,052 to 31,894,
representing a solid capacity growth of 127%. These niche and specialized
PCTC carriers are chartered out for as long as 15 years to blue chip customers
mentioned above, giving SSC solid visibility going forward.
And with the recent appointment of Chairman and Founder CK Ow’s son YH
Ow as the new CEO, the company has committed to new growth plans to
double their current fleet size over the next 2-3 years to scale new heights.
Given the long term charter contracts to solid blue chip customers we would
not be too concerned with its current debt to asset ratio of about 64% as we
believe that as long as SSC is able to continue to lock in long term charter
contracts with reputable blue chip customers going forward, banks would be
more than comfortable to grant them collateral loans close to the full value of
the vessel value. This is because the fi nanciers will have the fi rst charge over
the cash fl ows which are backed by these blue chip customers as well as the
good track record and reputation of SSC.
Final dividend was maintained at 1 cent a share, translating to a payout ratio
of 40% and yield of close to 3%. We believe with better profi ts ahead, higher
dividends can be expected going forward.
We are expecting Mar’16 and Mar’17 profi t to grow another 30-35%
to US$12mln and US$16mln after last year’s 22%, translating to an
undemanding forward and prospective PE of 9x and 7x. Assuming their usual
40% payout ratio, forward yields would be an attractive 4.3% and 5.6%, up
from 3% currently.
We maintain BUY.