Samudera Shipping

[Yoyo]

Looking at Samudera Indonesia result, my estimate of Samudera Shipping earning is US86m for 1q or 16 cents per share or 22 Singapore cents ( using 1usd to 1.37 sing).... Last year the company earns 32 cents but now 1st q ....22 cents....

I cannot believe also.....will double check and double check again

Hi Behappyalways

I second your estimate of USD 86m, though Owner Earning maybe off by up to 5% if factor for SSL MI portion.  SSL Owner Earning for 1Q2022 is probably in the range of USD 83m to USD 86m. (Nearly a million US dollar a day).

These numbers reflect the sizeable long term rate increase with its main line operators which contributes the bulk of its revenue.  Management is so low-keyed in its outlook communication, merely titled its 2021 AR RIDING the WAVE.

Seems like dividend is unlikely to be 0.5 cents in July.  Will there be a special interim?

[weijian]

 Management is so low-keyed in its outlook communication, merely titled its 2021 AR RIDING the WAVE.

It is not exactly wrong, isn't it.

If insiders, whom have been in the business their whole life, are demonstrating outward euphoria, then it would probably be a flashing red light. But of course, all surviving shippers have scars and know better.

Value investors generally prefer low key operators over high visible promoters.

[Squirrel]

Hi Squirrel, I no longer owns any SSL shares as of now as I no longer see a sufficient runway.

Just want to add some more personal observations. Most of the container shipping indexes like drewry and shanghai that are public are base on spot rates. Falling spot rates have been well publicised since a few months ago, and measured by the weekly indexes. The major carriers (top 10) had been renewing their contracts on multi-years base on the recent highs so they would have locked down thier profits for the next few years. Small feeders like SSL seem to be mainly on shorter 6-12 mths contract to the top10, as they had revealed.
So I see the current container shipping upcycle as a food chain. From the top: ship owners->major carriers->feeder carriers->shippers. The feeders wil normalise before the major carriers. So far I have not seen any boss from the carriers say there will be a new norm. So its a case of making hay while the sun shines, and the sun may shine for quite a while more.

For now, it seems that you picked the right moment to exit! Well played.

[Yoyo]

Hi Squirrel and Mushy

Would you guys reconsider to take up some position on Samudera?  Though cyclical, Year 2022 results is probably another record.  I will feel more at ease with your guys abroad.  More eye-balls on the shipping developments.

Samudera Revises its Yearly Revenue Target to US$ 1 Billion
https://indoshippinggazette.com/2022/sam...-1-billon/

“Now demand is still high, even tends to be higher following the relaxation of China lockdown. Containerized trade seems to again increase,” Samudera President Director Bani Mulia has said as Kontan quoted.

Such high demand, according to Bani, had kept the freight rate steady at high level. These indicators have supported Samudera Indonesia to revise its yearly target of 2022. “We have increased our target to US$ 1 billion, from US$ 700 million target set up in early year. In the first half, we are very optimistic to reach US$ 500 million,” Bani said.

Of these total 10 new fleets, one tanker has been delivered and now being in operation, while another tanker and two containerships are scheduled to be delivered before the end of this year.

[bryan2003]

Samudera Indonesia has released its 5 months result as per below link.

https://www.idx.co.id/StaticData/NewsAnd...1bdcce.pdf

The profit from the owner entity is USD 94.8M. Since Samudera Singapore is contributing 65% to Samudera Indonesia, if we do backward engineering, Samudera Singapore's 5 months profit should be around USD 120M. So 5 months profit is almost exceed 2021FY profit.

Also, the CEO has revised the FY target to 1B USD as below link.

https://indoshippinggazette.com/2022/sam...-1-billon/

Avoid the noise and stay invested.

[Yoyo]

A good read on the containership industry.
https://www.freightwaves.com/news/contai...ill-rising

Macro facts - Softening demand and Growing vessel supply.
Vessel Supply - Newbuild Orderbook nears 30% of containership capacity on the water, of interest is the small regional vessels that mostly will be deploy in intra-Asia trades.
What carriers can do ie tools - Blank sailings, charter expirations (own vs lease), scrapping, slow steaming

The top 10 carriers plying the transpacific and transatlantic trade (totally 70% traffic) is able to deploy Blank Sailing to cushion the weaker freight rate.  Not so for Samudera given the many small players in the intra-Asia trade.  Charter expiration is an feasible option in the near future.  Scrapping and slow steaming - not much as Samudera has recently undergone a vessel rejuvenation.

It is said that the global shipping boom is ending, if not already ended, but the appreciated freight rate has a long tail till its normalisation.  Question is how long is long.  Samudera has recently jerked its 2022 revenue target citing increasing demand and strengthened contracted rate.

The intra-Asia and regional routes are dotting with many small vessels. I have no idea whether they are largely aging (suspect due to delayed scrapping), highly susceptible to environmental regulation, necessitating scrapping or slow steaming.  Hopefully these will be enough to partially offset the negative impact of upcoming newbuild.  

Only time can tell.  As of now, I looking forward to the July results release, hopeful of a fat interim dividend.  30 days to go, and I am counting.

PS: Anybody who is well versed with the shipping industry (particularly the highlighted bold sentence), please enlighten.  Many thanks.

[Yoyo]

Drewry: Beginning of the End for Container Shipping’s Bull Run
https://gcaptain.com/drewry-beginning-of...-bull-run/

Container shipping’s pandemic-fueled boom cycle has undoubtedly taken a turn in recent months, but lingering congestion is likely to prevent a swift return to normal, says Drewry in its latest Container Forecaster report published Thursday.

Falling demand has driven container spot freight rates lower on a weekly basis over the last four months and high inflation is eroding confidence that volumes will stage much of a comeback. “It certainly feels like we are at the beginning of the end of the container market bull run,” says Drewry.

Although carriers have proven that they can deploy strategies to uphold profits despite lower volumes, as evident from Q1 results, container shipping stocks have certainly taken a hit. Drewry’s report notes that while the container market has definitely turned, the winding down of high rates and carrier profits will likely take some time—with no significant loosening likely until the second half of 2023.

[Behappyalways]

Samudera this year probably will make record profits and giving out bumper dividends But why is the market selling down the other container shippers share. (Notice their PE ratio). Market is quite bearish on their future earnings. If those companies are not going to do well then Samudera with 70-80% of the revenue from the main line operators will also be affected although there might be a lag effect.

经济不好,航运也不回好

Still vested but pare down quite a lot. By the way there is a big Cheng Kay in this counter, not Mr Teo I think. I was kinda waiting for him to pump but decided to take some profit and sell to him.... The Cheng Kay is still (stuck) in it. You see the recent run up to 87.....it is him....

My two cents worth

https://www.google.com/search?q=yang+min...e&ie=UTF-8


https://www.google.com/search?q=wan+hai+...e&ie=UTF-8

https://www.google.com/search?q=zim+shar...e&ie=UTF-8

I have sought some information from Samudera Shipping yesterday via Ms Alvina Tan of Ark Advisors, the company investor relations consultant.

Questions raised:
1.  What is the estimated ratio of revenues based on spot rate and contracted rate for the container shipping business?
2.  For customers on contracted term rate, usually they are signed/lock-in for how long (ie years)?
3.  Has Samudera Shipping began levying fuel surcharge on its customers?

Answers given:
1. The bulk of Samudera's container slots are contracted to the main line operators (ie, the bigger shipping lines that ply Asia - US/Europe) and these contribute approximately 70-80% of the Company's revenue.
2. The duration of a typical contract period  is 12 months and is subject to renewal upon expiry.
3.  Yes, the company currently has a scheme of arrangement which allows it to pass on a fuel surcharge to its customers.

As such, it should not come as a surprise for higher revenue and profit for this year.  As it is, its parent company Samudera Indonesia has reported first 2 months earnings of US$33.7m Vs US$5.1m a year ago.  These answers certainly sounded music to my ears and I am looking forward to another record breaking year.  Hoping for an interim dividend of $0.005 and special interim dividend of $0.05 comes August (Samudera Shipping can easily accommodate given its ballooning cash position)

Vested

[Yoyo]

Thanks for sharing, Behappyalways. 

Agreed that the financial wellbeing of Samudera is closely tied to their principal customers.  If I remember correctly, Top 2 already commands 30% revenue.  I has been puzzled by the word "Cheng Kay" that you use from time to time.  You must be referring to Chng Kae (pronounced “Cheng Kay”), is Hokkien for banker (莊家).  If there is one keen to accumulate, that is good.  We need more deep-pocketed investors like Mr Teo.

Yes, the PE ratio of the container ships stocks have been quite low, I have been watching Zim, noted that it is at a recent low USD 45 (nearly half of the USD 88 in March 2022).  Samudera Indonesia share price has surged to a all time high of 4080 in 7 June and has since dropped to 2590. (37% over 3 weeks).  Such market irrationality.  However, given the poor market sentiment, all listed companies look lemon to me.  I will probably wait for the July result release.

[Squirrel]

Hi Squirrel and Mushy

Would you guys reconsider to take up some position on Samudera?  Though cyclical, Year 2022 results is probably another record.  I will feel more at ease with your guys abroad.  More eye-balls on the shipping developments.

Samudera Revises its Yearly Revenue Target to US$ 1 Billion
https://indoshippinggazette.com/2022/sam...-1-billon/

“Now demand is still high, even tends to be higher following the relaxation of China lockdown. Containerized trade seems to again increase,” Samudera President Director Bani Mulia has said as Kontan quoted.

Such high demand, according to Bani, had kept the freight rate steady at high level. These indicators have supported Samudera Indonesia to revise its yearly target of 2022. “We have increased our target to US$ 1 billion, from US$ 700 million target set up in early year. In the first half, we are very optimistic to reach US$ 500 million,” Bani said.

Of these total 10 new fleets, one tanker has been delivered and now being in operation, while another tanker and two containerships are scheduled to be delivered before the end of this year.

Hi Yoyo,

I probably won’t be looking at buying back Samudera anytime soon unless it falls to very attractive levels.

I have been shoring up cash by selling positions such as Samudera. My view was that a recession is coming and I want to have the cash to pick up bargains along the way. That is why I sold Samudera even though I was of the view that I am leaving money on the table. (Alas that was a lot of money… haha). I won’t want to be “stuck” with the position if it falls.

It probably sounds very stupid to forummers here, but I have started dipping my toes into buying tech stocks. I have not been buying tech stocks (except Alphabet, Baba and Tencent which I had exited two of the three names before the crash) during the super bull run, those growth stocks that Cathie Wood espouses.

I had never seen “value” in these growth stocks, unable to understand their appeal. With the recent crash shaving off 70-90% off these stocks, I am finally starting to see “value” in a selected few.

So far, catching the knives has been painful but I have a plan with the warchest I have accumulated. Hopefully it works out.

Long story above, but in short I am not looking to buy back Samudera in the near term unless it corrects significantly. I think more forummers are seeing the news dragging down world shipping business as per the few posts above. I strive to make money but more importantly, I strive to not lose money.