Lead Analyst, Drewry Maritime Financial Research

Victoria Saraglis

Lead Analyst

Maritime Sector, Equity & Credit Research

Drewry Maritime Financial Research

With no ties to other players in the shipping, finance or banking world, we provide a uniquely impartial view of the markets and companies we cover. Our parent organization, Drewry is a leading independent provider of research services to the maritime and shipping industry, employing over 100 professionals across an international network of offices in London, Delhi, Singapore and Shanghai. Combining our market-leading resources with seasoned sector expertise DFRS offers a highly differentiated and comprehensive range of investment and financial research services to lenders and prospective investors in publicly listed maritime and shipping companies. The full service of reports, supporting resources and sector orientated webinars provides our clients with the most complete picture of the organisations under coverage as is possible. We have been charting and analysing the world’s maritime markets for more than 40 years. This unrivalled intelligence and understanding provides the foundation of our research service. Our analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight and research data available today. We look at globally listed companies within the following sectors: Port Operators, Container Shipping, Container Manufacturing & Leasing, LNG Shipping, Dry Bulk Shipping and Tanker Shipping. Combine in-depth sector expertise with financial analysis focusing on over 50 stocks globally.

Equity Bottom-Up

Earnings dip quarter-on-quarter, but stay well above levels reported in the same quarter last year; Tanker business manages to break-even: The dry bulk cargo segment contributed a net profit of USD 18m and an adjusted net profit of USD 8.8m in the first-quarter 2018, compared with a net loss of USD 9.4m in the first-quarter of 2017. Earnings in the dry bulk segment remained strong on the back of robust trade of coal and minor bulk commodities. On the other hand, the tanker business was off to a…

Earnings dip quarter-on-quarter, but stay well above levels reported in the same quarter last year; Tanker business manages to break-even: The dry bulk cargo segment contributed a net profit of USD 18m and an adjusted net profit of USD 8.8m in the first-quarter 2018, compared with a net loss of USD 9.4m in the first-quarter of 2017. Earnings in the dry bulk segment remained strong on the back of robust trade of coal and minor bulk commodities. On the other hand, the tanker business was off to a…

Can Dry-Bulk Earnings Offset the Losses from the Tanker Segment?

Equity Research Analyst, Maritime sector, Drewry Maritime Financial Research

Ankush Kathuria CFA, FRM

Equity Research Analyst, Maritime sector

Thematic (Sector/Industry)

<ul><li>After a strong freight rate rally in 2017, which also rubbed on stock prices, we have seen a significant correction in the recent past as the BDI has come down sharply from 1,743 in December to the current 1,089. The underlying reason for this revision is the seasonal weakness, owing to muted industrial activity in China. The moderation in commodity demand was exacerbated by the lag effect of steel production cuts announced by the Chinese government in October 2017. </li><li>Dry bulk stocks have witnessed outsized gains in 2017, but have corrected sharply amid the global rout in capital markets and the recent correction in dry bulk rates. We believe this provides an opportunity for investors to enter frontline stocks with no liquidity concerns. We prefer Star Bulk Carriers Corp (SBLK US) and Scorpio Bulkers (SALT US) as both have a well-balanced charter coverage, which will support earnings in first-quarter 2018, and are available at attractive valuations.</li></ul>

After a strong freight rate rally in 2017, which also rubbed on stock prices, we have seen a significant correction in the recent past as the BDI has come down sharply from 1,743 in December to the current 1,089. The underlying reason for this revision is the seasonal weakness, owing to muted industrial activity in China. The moderation in commodity demand was exacerbated by the lag effect of steel production cuts announced by the Chinese government in October 2017. Dry bulk stocks have witnessed outsized gains in 2017, but have corrected sharply amid the global rout in capital markets and the recent correction in dry bulk rates. We believe this provides an opportunity for investors to enter frontline stocks with no liquidity concerns. We prefer Star Bulk Carriers Corp (SBLK US) and Scorpio Bulkers (SALT US) as both have a well-balanced charter coverage, which will support earnings in first-quarter 2018, and are available at attractive valuations.

Dry Bulk Shipping - Recovery to Normalise in 2018

Panamax/Supramax rates could outperform larger vessels: In 2017 so far, the Capesize segment has led the rally backed by a strong recovery in steel production and iron-ore imports by China. However, in view of the steel production cuts announced by the Chinese government during the fourth quarter, we expect Panamaxes and Supramaxes to lead the next leg of the rally in freight rates. Rates for these vessels will benefit from robust thermal coal imports by China and India in the fourth quarter…

Panamax/Supramax rates could outperform larger vessels: In 2017 so far, the Capesize segment has led the rally backed by a strong recovery in steel production and iron-ore imports by China. However, in view of the steel production cuts announced by the Chinese government during the fourth quarter, we expect Panamaxes and Supramaxes to lead the next leg of the rally in freight rates. Rates for these vessels will benefit from robust thermal coal imports by China and India in the fourth quarter…

DMFR – D/S NORDEN (DNORD) – Company Update – Product Tankers to Join the Dry Bulk Bandwagon?

D/S Norden (DNORD DC, Neutral, DKK 130)–1Q17 Results-Improvement in Dry Bulk Market Not Capitalised<ul><li>
Earnings return to the black assisted by sporadic increase in tanker earnings:D/S NORDEN’s (DNORD) reported TCE revenue of USD 211m in 1Q17, an increase of 12% q/q from USD 189m in 4Q16. The dry bulk segment contributed USD 158m (aided by an increase in vessel days) and the remaining USD 53m came from the tanker segment. The company returned to profit with adjusted net income of USD 0.9m compared…</li></ul>

D/S Norden (DNORD DC, Neutral, DKK 130)–1Q17 Results-Improvement in Dry Bulk Market Not Capitalised
Earnings return to the black assisted by sporadic increase in tanker earnings:D/S NORDEN’s (DNORD) reported TCE revenue of USD 211m in 1Q17, an increase of 12% q/q from USD 189m in 4Q16. The dry bulk segment contributed USD 158m (aided by an increase in vessel days) and the remaining USD 53m came from the tanker segment. The company returned to profit with adjusted net income of USD 0.9m compared…

D/S Norden (DNORD DC, Neutral, DKK 130)–1Q17 Results-Improvement in Dry Bulk Market Not Capitalised

D/S NORDEN ( DNORD DC) - Tanker Segment Continues to Drag Earnings<ul><li>
Tanker segment continues to drag earnings: D/S NORDEN’s (DNORD’s) TCE revenue declined 29% y/y to USD 170m in 3Q16, and was broadly in line with our estimate of USD 162m. TCE revenue for the dry bulk segment was USD 123m, lower than 2Q15, but was 10% higher than 2Q16 as rates have trended up since February. Meanwhile, the TCE revenue in the Tanker segment was down 47% y/y and 16% q/q to USD 47m as average rates for the MR vessels…</li></ul>

D/S NORDEN ( DNORD DC) - Tanker Segment Continues to Drag Earnings
Tanker segment continues to drag earnings: D/S NORDEN’s (DNORD’s) TCE revenue declined 29% y/y to USD 170m in 3Q16, and was broadly in line with our estimate of USD 162m. TCE revenue for the dry bulk segment was USD 123m, lower than 2Q15, but was 10% higher than 2Q16 as rates have trended up since February. Meanwhile, the TCE revenue in the Tanker segment was down 47% y/y and 16% q/q to USD 47m as average rates for the MR vessels…

D/S NORDEN ( DNORD DC) - Tanker Segment Continues to Drag Earnings

Denmark

D/S Norden A/S is an international shipping company.  The Company operates a fleet of modern bulk vessels and tankers consisting of company owned vessels and long-term and short-term chartered cargo ships.  D/S Norden transports commodities such as coal, fertilizer, grain, sugar, and steels, as well as crude oil and other liquids.  The Company operates worldwide.

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D/S Norden (DNORD DC)

Can Dry-Bulk Earnings Offset the Losses from the Tanker Segment?

Earnings dip quarter-on-quarter, but stay well above levels reported in the same quarter last year; Tanker business manages to break-even: The dry...

Drewry Maritime Financial Research

Dry Bulk Shipping - Recovery to Normalise in 2018

After a strong freight rate rally in 2017, which also rubbed on stock prices, we have seen a significant correction in the recent past as the BDI...

Drewry Maritime Financial Research

DMFR – D/S NORDEN (DNORD) – Company Update – Product Tankers to Join the Dry Bulk Bandwagon?

Panamax/Supramax rates could outperform larger vessels: In 2017 so far, the Capesize segment has led the rally backed by a strong recovery in steel...

Drewry Maritime Financial Research