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(12-02-2016, 11:21 PM)Contrarian Wrote: > That said, however, I do like the strong statement from the management that :“It is operationally and financially ready to undertake
> further vessel acquisitions subject to satisfactory terms.
With the japanese -ve interest rates policy, will SSC get to borrow at a lower rate from japan banks, especially if charterer is NYK?
Hopefully they can buy a modern RORO ship in distressed sale prices :-)
Negative rate is likely to be neutral for ssc as interest rate and chartering rates are pre set in contracts.
At this junction,shareholders can't complain much about the business direction undertake by Ow,trade upside for stability in earning is the name of the game in a shipping crisis worse than 2008 gfc
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13-02-2016, 12:13 PM
(This post was last modified: 13-02-2016, 12:15 PM by CCUV.)
The cash generation is amazing,they could effectively be debt free within 6 years
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3Q2016 results (ending 31th Dec 2015):
Revenue (USD million)
FY2014 = 34.446
FY2015 = 35.126
1Q2016 = 11.706
2Q2016 = 12.488
3Q2016 = 12.900 (9M2016 = 37.094)
Revenue - Ship Owning (USD million):
FY2014 = 17.849
FY2015 = 19.527
1Q2016 = 8.930
2Q2016 = 9.209
3Q2016 = 9.209 (9M2016 = 27.348)
(Note: Annualized 4 x 9.209 = 36.836 vs revenue of 36.637 as projected on page 111 of AR2015 => close....)
Revenue – Agency & Logistic (USD million):
FY2014 = 16.597
FY2015 = 15.599
1Q2016 = 2.776
2Q2016 = 3.279
3Q2016 = 3.691 (9M2016 = 9.746)
NPAT (USD million)
FY2014 = 8.558
FY2015 = 9.310
1Q2016 = 3.036
2Q2016 = 4.242
3Q2016 = 4.165 (9M2016 = 11.443)
EPS (USD, Cent)
FY2014 = 2.0
FY2015 = 2.1
1Q2016 = 0.7
2Q2016 = 1.0
3Q2016 = 0.9 (9M2016 = 2.6)
OCF – After Change in Working Capital (USD million)
FY2014 =11.572
FY2015 =12.246
1Q2016 = 7.450
2Q2016 = 5.208
3Q2016 = 7.567 (9M2016 = 20.225)
Cash and Cash Equivalent (USD, Million)
FY2014 = 6.003 (Bank borrowing = 15.821)
FY2015 = 7.297 (Bank borrowing = 107.602)
1Q2016 = 10.332 (Bank borrowing = 104.555)
2Q2016 = 8.101 (Bank borrowing = 101.508)
3Q2016 = 11.785 (Bank borrowing = 98.461)
DPS
FY2014 = SGD 1.0 cent
FY2015 = SGD 1.0 cent
FY2016 = ????????????
Comments:
1) 9M2016 revenue, NPAT and OCF already exceeded that of FY2015, with full charter income from the 3 vessels.
2) Agency and logistics business will remain profitable, albeit challenging.
3) Quarterly revenue from ship owning seemed stabilized at 9.209 m.
4) The group has generated OCF of 20.225 m in 9M2016, more than enough to cover (yearly repayment of bank borrowing + interest payment + dividend payment) of about 18 m, with excess OCF available for investment (acquisition of more vessels.)
5) Given its strong cash position, the Group is ready to undertake further acquisitions should any of the opportunities meet our investment criteria.
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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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> Negative rate is likely to be neutral for ssc as interest rate and chartering rates are pre set in contracts
Boss, I am referring to chartering contracts that come with additional ships that they buy. The japanese bank will probably offer lower rate with -ve interest rates esp with the stability of 200-yr multiple business of NYK shipping.
If they can repeat the feat of buying a vessel for half price from any distressed seller and NYK wants the ship. Then the sky will be the limit.
My only question is the Loan rate for long-term and the exchange rate. Does the jap bank agree to fix rate for a 10 yr charter?
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In theory, the Group can safely pay up 2.5 SG cents dividend annually. But, since they intend to double the fleet in 3 years, I wonder would the Management consider increasing the dividend to 1.5 cents?
(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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13-02-2016, 03:53 PM
(This post was last modified: 13-02-2016, 03:59 PM by CCUV.)
(13-02-2016, 01:58 PM)Contrarian Wrote: > Negative rate is likely to be neutral for ssc as interest rate and chartering rates are pre set in contracts
Boss, I am referring to chartering contracts that come with additional ships that they buy. The japanese bank will probably offer lower rate with -ve interest rates esp with the stability of 200-yr multiple business of NYK shipping.
If they can repeat the feat of buying a vessel for half price from any distressed seller and NYK wants the ship. Then the sky will be the limit.
My only question is the Loan rate for long-term and the exchange rate. Does the jap bank agree to fix rate for a 10 yr charter?
I no boss lah,I suspect the price of roro with a yum long term contract
Might have gone up since the cost of financing is coming down due to
Neg rates
The bank could fixed the borrow rate for a long time as in this case nyk as original deal generator given the lower risk. They could package the loan to investor which are willing to take any yield higher than the negative rates,in the process making a safe spread from the loan
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13-02-2016, 03:54 PM
(This post was last modified: 13-02-2016, 04:03 PM by CCUV.)
(13-02-2016, 02:00 PM)Nick Wrote: In theory, the Group can safely pay up 2.5 SG cents dividend annually. But, since they intend to double the fleet in 3 years, I wonder would the Management consider increasing the dividend to 1.5 cents?
(Not Vested)
1.5c dividend make a lot of sense,having enough cash for debt
Repayment and reinvestment
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> In theory, the Group can safely pay up 2.5 SG cents dividend annually. But, since they intend to double the fleet in 3 years, I wonder
> would the Management consider increasing the dividend to 1.5 cents?
And this is the time for growth for RORO industry. New CEO has got something to prove, double fleet in next 3 years.
So I dont think he will increase the dividend for now.
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13-02-2016, 08:29 PM
(This post was last modified: 13-02-2016, 08:29 PM by ksir.)
Roro rate has been consistently high in this bloody shipping environment. I wonder why the economic so different? Is it sustainable? Too good to be true?
My views are your Gilbert & Sullivan's:
"The flowers that bloom in the spring, have nothing to do with the case".
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13-02-2016, 10:21 PM
(This post was last modified: 13-02-2016, 10:32 PM by CCUV.)
(13-02-2016, 08:29 PM)ksir Wrote: Roro rate has been consistently high in this bloody shipping environment. I wonder why the economic so different? Is it sustainable? Too good to be true?
Japanese look after Japanese,the brotherly love thingy,senior Ow been Chairperson of Mitsui&co singapore helps in that regards
most of the roro would have secure a long term contract with a car or truck manufacturer before they build new ship. Those who try doing spot on roro die cock stand. You can ship anything using a container but you can't ship anything with a roro thus a less popular choice of ships for speculators to build. It is how it works,got contract build,no contract no go(for most shippers doing roro)
Cut the long story short,in doing business with Japanese,it is upmost relationship first,price secondary to an extent
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