ok. I thought the 49 million convertible was part of the 658 million debt. Also, I made a mistake of neglecting the finance costs.
Anyway, after reworking, I end up with a 60 SGD cent value assuming a downcycle valuation of the ships.
I did not explain it properly, but my point in the quick and dirty illustration was basically to say that a majority of the valuation lies in the period beyond the weighted average 5 year life of the committed cashflows. If I assume that the NAV merely declines in a straightline, I end up with a SGD$1.35/sh value. The NAV being a proxy for the charter rates which RMT would be able to get. Most likely the answer will be somewhere between 60 cents and $1.35 depending on your assumptions.
Rickmers released their financial results yesterday,
the 0.6 UScents distribution is maintained.
As the container shipping market is tumbling and the prospect being loomed by euro and us debts issues,
It's likely that mgmt policy is to be conservative and distribution be kept at 0.6 UScents.
Total income about $25mil, loan repayment is about $11mil, interest expense at $10mil, and distribution is only at about $2.6mil. Money continues to flow to banks rather than benefiting shareholders. One concern is, interest rate may increase in the following years, and the company is still bearing 600mil+ debts.
I have exited from this counter today @0.405.
Not a very desirable price considering I'm giving up the coming dividend. I likely won't be keen in shipping counters in the near term. This industry is cyclical and probably now it's not their time.
Current yield is at about 7%, and the quarterly results suggest that it can be maintained. It's traded at big discount to NAV at current price.
Anyone who vested in RMT knows when they are gonna publish their 4th quarter financial results?
It should be in February with the usual 0.6 US cent dividend (assuming no major changes).
(Not Vested)
For people interested in Rickmers Maritime:
13 Feb 2012
Full Year Results
A conference call will be held at 6.00 p.m. (SG time) with Dial-in: 800 6163 105 (For callers dialling from Singapore).
Thanks for the update. I guess the main highlight will be whether Kaethe Rickmers vessel have a job next month ?
(Not Vested)
Back into this counter again...
Can see freight rates turning up..
BDI also turning up...
At current price of 0.305 with 9.8% dividend yield...
Worth a punt at the shipping recovery story..
Hmm here are some points I wish to raise -
1) The CSAV vessel lease will expire this month and the current freight rates are nowhere near the contracted rate so revenue will drop.
2) The counter-party risk remains high since virtually all container coys are in the red.
3) Leases are starting to expire late next year. If there is no recovery in the container market by then, the revenue will take a huge hit.
4) The debt amortization is rising every year. Is there room for dividend payment in the future ?
5) There is a shift towards > 10,000 TEU vessels - will Rickmers fleet of panamax 4,000 - 5,500 TEU vessels still be attractive to shipping liners ?
6) The conversion of the CB (if the parent converts in 2014) will be dilutive to existing stakeholders.
This are some 'pessimistic points' which I just thought off. Best to understand the risk also ! The reverse is also possible that the container sector will recover and RMT can refinance their debt, raise their dividend and sell new stock to buy new vessels. Let's see how it goes !
(Not Vested)
RICKMERS MARITIME ENTERS INTO A TIME-CHARTER AGREEMENT WITH MSC – THE 2ND LARGEST CONTAINER LINER COMPANY IN THE WORLD
http://info.sgx.com/webcoranncatth.nsf/V...00032B4A4/$file/Rickmers_PressRelease_130312.pdf?openelement [Press Release]
RMT managed to secure a 1 + 1 year charter for its vessel at US$7,600 / day for the first year and option to increase to US$23,750 / day in the second year if the market recovers.
(Not Vested)
I have been investing this account for 2 years.
Kaethe Maritime has chartered out with low rate till next year. Give myself till early 2013. Just collect the dividend and see how.