Singapore Shipping Corp

Why are the counter parties of SSC, namely NYK and MITSUI trading at 0.5x NAV?

Why is there such a big gap in P/B valuations of SSC and its counter parties, despite the fact that
1) the assets are essentially from MITSUI and NYK
2) charter income are derived mainly from MITSUI and NYK

Has anyone done sufficient work on the risks resulting from the price fixing conspiracy involving SSC's counter parties in the RORO trade? Would this spell an end to the cartel-like stronghold of the guilty shipping companies?

(12-10-2015, 09:51 PM)CityFarmer Wrote:

(23-09-2015, 06:24 PM)Nick Wrote: That's the advantage of locking up charters at fixed rate for over a decade. Riding out cycles.

(Not Vested)

IIRC, Nick, you had vested in this company. Did you divest during the recent mini crisis?

(not vested)

Sold it off before it dip and switch to new investments. Big regret not re-acquiring at 25 cents.

My target NPAT is US$13-14 million. Fairly attractive PE at this range still.

(13-10-2015, 07:53 PM)Nick Wrote:

(12-10-2015, 09:51 PM)CityFarmer Wrote:

(23-09-2015, 06:24 PM)Nick Wrote: That's the advantage of locking up charters at fixed rate for over a decade. Riding out cycles.

(Not Vested)

IIRC, Nick, you had vested in this company. Did you divest during the recent mini crisis?

(not vested)

Sold it off before it dip and switch to new investments. Big regret not re-acquiring at 25 cents.

My target NPAT is US$13-14 million. Fairly attractive PE at this range still.

I reckon, the re-allocation should be for a better one.

Thank for the update

2Q 2016 result

http://infopub.sgx.com/FileOpen/SECOND%2...eID=377557

Very impressive Mr Ow

(11-11-2015, 08:00 PM)CCUV Wrote: 2Q 2016 result

http://infopub.sgx.com/FileOpen/SECOND%2...eID=377557

Very impressive Mr Ow

Q2 ship owning results showed only a marginal 200k USD increase vs Q1 results.

Bulk of profit increase from Q1 came from forex gains.

RHB:

SSC delivered a stellar set of 2QFY16 results that beat our expectation by 20%. Maintain BUY with a DCF-derived SGD0.67 TP (from SGD0.59, 123% upside, WACC: 10%, terminal growth: 0%), implying 11.7x FY17F P/E. Most notably, we are encouraged by its bullish outlook statement, which implies that a new vessel acquisition (with favourable contract terms in-built) is on the horizon without an equity-raising exercise.
2QFY16 (Mar) results beat estimates.Beating our estimates by 20%, Singapore Shipping Corporation (SSC) delivered stellar 2Q results with net income surging 136.4% YoY and 36.5% QoQ to USD4.2m. This was due to the absence of several one-off items such as: i) a vessel that was off hire for dry-docking (likely to be one of the smaller vessels), and ii) one-off crew hiring and training costs for the newly-delivered vessel (MV Taurus) that occurred in 1QFY16.
Promising outlook looks set in stone. As we pointed out previously, SSC’s ship owning business is extremely safe (>10 years contract with the customer bearing most of the variable costs). Without factoring in any new vessel acquisitions, 2QFY16 provided a very good indication of what SSC can and would likely deliver every quarter. Hence, we raise our FY16 and FY17 earnings estimates by 14.2% and 12.7% respectively to account for operating costs that came in lower than expected.
Strong operating cash flow powers new vessel acquisition. Key to the 2QFY16 results is a very bullish outlook statement indicating that SSC is operationally and financially ready to undertake new vessel acquisitions with satisfactory terms. In 1HFY16 alone, SSC generated USD12.6m of net operating cash flow, equivalent to around 2/3 of the cost of a second hand vessel. Hence, this justifies our thesis that SSC can purchase new vessels without raising any equity. Also, as management had previously indicated that new vessel purchases would come with favourable contracts terms like: i) long-term charters, ii) blue-chip customers, and iii) solid returns comparable to current vessels, we can expect a new vessel with favourable terms on the horizon. This would make our base case of one new vessel per year well-founded.
To access the report, please click on the following link:
Today's report: Singapore Shipping Corp : Call Of Conviction(12 Nov 15)

2Q2016 results (ending 30th Sep 2015):

Revenue (USD million)
FY2014  = 34.446
FY2015  = 35.126
1Q2016 = 11.706
2Q2016 = 12.488 (1H2016 = 24.194)
 
Revenue - Ship Owning (USD million):
FY2014 = 17.849
FY2015 = 19.527
1Q2016 =  8.930
2Q2016 =  9.209 (1H2016 = 18.139)
(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 (1H2016 = 6.055)
 
NPAT (USD million)
FY2014  = 8.558
FY2015  = 9.310
1Q2016 = 3.036 
2Q2016 = 4.242   (1H2016 = 7.278)
 
EPS (USD, Cent)
FY2014  = 2.0
FY2015  = 2.1
1Q2016 = 0.7  
2Q2016 = 1.0  (1H2016 = 1.7)
 
OCF – After Change in Working Capital (USD million)
FY2014  =11.572
FY2015  =12.246
1Q2016 =  7.450 
2Q2016 =  5.208   (1H2016 = 12,657)
 
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)
 
DPS
FY2014 = SGD 1.0 cent
FY2015 = SGD 1.0 cent
 
Comments:
1) Net profit for the Group improved with full charter income from 3 vessels in Q2 FY2016.
2) Agency and logistics business will remain profitable, albeit challenging.
3) OCF actually decreased from 1Q2016 (of 7.450 m) to 2Q2016 (5.208 m) due to increase in working capital.
4) Hence, I reckon it is still not easy at this stage to be able to project with high degree of accuracy on the likely stabilized annual OCF which must cover (yearly repayment of bank borrowing + interest payment + dividend payment ) of about 18 m, to arrive at the amount of excess CF available for investment (acquisition of more vessels.)
5) 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.” – Ha-ha!
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World class Ow.....one and only making big money with ships

http://infopub.sgx.com/FileOpen/Final%20...eID=388998

SINGAPORE Shipping Corporation (SSC) posted a third quarter profit after tax of US$4.17 million, up 38.7 per cent from US$3.00 million last year.

Revenue for the quarter surged 39.3 per cent to US$12.9 million.

Third quarter revenue and operating profit was lifted along with the delivery of three vessels to the ship-owning division, which off-set lower contributions from agency and logistics segment, SSC said in a Singapore Exchange results announcement.

During the quarter, SSC also posted a one-time gain of about US$84,000 from the sale of Nanyang Maritime (S'pore) Pte Ltd.

Nine-month profit was US$11.44 million, up 73.4 per cent as revenue rose 49.8 per cent to US$37.09 million.

Nine-month earnings per share was 2.6 US cents compared to 1.5 US cents a year ago.

> 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 :-)