Fundamental Analyses, Contrarian Cashflows

Contrarian Cashflows

Fundamental Analyses

The purpose of Contrarian Cashflows is to document my investment research and share it with everyone who is interested in value investing. My long term aspiration for Contrarian Cashflows is to become a platform for professional investors and serious amateurs where they can get inspiration and discuss investing-related topics.
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Thematic (Sector/Industry)

<ul><li>Each week, I’ll share five intriguing investment ideas that recently caught my attention. These ideas are meant to spark your research and help you kickstart the week ahead with fresh insights.</li><li>Because these ideas are the result of my first-level idea generation process, they require more in depth research. Therefore, the ideas will often be concise, with occasional references to valuable work from other practitioners that I encourage you to explore.</li><li>If you have something fascinating to share that could benefit me and the wider community, don’t hesitate to send it my way—I’d love to hear from you!</li></ul>

Each week, I’ll share five intriguing investment ideas that recently caught my attention. These ideas are meant to spark your research and help you kickstart the week ahead with fresh insights.Because these ideas are the result of my first-level idea generation process, they require more in depth research. Therefore, the ideas will often be concise, with occasional references to valuable work from other practitioners that I encourage you to explore.If you have something fascinating to share that could benefit me and the wider community, don’t hesitate to send it my way—I’d love to hear from you!

Leading International Investment Research, Edison Investment Research

Edison Investment Research

Leading International Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Equity Bottom-Up

Ernst Russ (ERAG) reported robust results in FY21, with fully diluted EPS increasing fourfold to €0.49 from €0.12 in FY20, as the top line and profitability significantly improved year-on-year. The revenue from shipping increased 117% y-o-y, mostly on the back of a 74% increase in charter rates. The remaining activities of ERAG are being phased down and made up 12% of revenues in FY21 (33% in FY20). ERAG reported its adjusted EBIT margin at 33%, compared to only 5% in FY20.

Ernst Russ (ERAG) reported robust results in FY21, with fully diluted EPS increasing fourfold to €0.49 from €0.12 in FY20, as the top line and profitability significantly improved year-on-year. The revenue from shipping increased 117% y-o-y, mostly on the back of a 74% increase in charter rates. The remaining activities of ERAG are being phased down and made up 12% of revenues in FY21 (33% in FY20). ERAG reported its adjusted EBIT margin at 33%, compared to only 5% in FY20.

In H121, Ernst Russ (ERAG) continued its fleet expansion with the acquisition of two multipurpose vessels, bringing the number of majority owned ships to 18. It also sold the Bremen Fund management subsegment, decreasing its assets under management (AUM) in the management services segment, by €0.2bn to €0.6bn at end-June 2021. On the back of robust market environment for container shipping and healthy operational performance, management introduced the FY21 guidance with targeted revenues ranging from €85m to €90m and EBIT between €24m and €26m (compared to €55.6m and €2.3m in FY20, respectively).

In H121, Ernst Russ (ERAG) continued its fleet expansion with the acquisition of two multipurpose vessels, bringing the number of majority owned ships to 18. It also sold the Bremen Fund management subsegment, decreasing its assets under management (AUM) in the management services segment, by €0.2bn to €0.6bn at end-June 2021. On the back of robust market environment for container shipping and healthy operational performance, management introduced the FY21 guidance with targeted revenues ranging from €85m to €90m and EBIT between €24m and €26m (compared to €55.6m and €2.3m in FY20, respectively).

In H120, Ernst Russ (ERAG) recorded a 39% increase in revenues, mainly driven by the accounting effect of the full consolidation of the Elbfeeder JV, following the acquisition of an additional 2% stake in July 2019. The positive impact from expanding ERAG’s own fleet to 14 vessels, which more than doubled the income in the shipping segment, was partially offset by the disposals of non-core activities as part of streamlining the business. Together with the headcount reduction and other cost-cutting measures, it translated into an operating profit and net profit for the period of c €1.8m, against losses reported in H119. Management guides for a positive operating result in the low single-digit millions for FY20.

In H120, Ernst Russ (ERAG) recorded a 39% increase in revenues, mainly driven by the accounting effect of the full consolidation of the Elbfeeder JV, following the acquisition of an additional 2% stake in July 2019. The positive impact from expanding ERAG’s own fleet to 14 vessels, which more than doubled the income in the shipping segment, was partially offset by the disposals of non-core activities as part of streamlining the business. Together with the headcount reduction and other cost-cutting measures, it translated into an operating profit and net profit for the period of c €1.8m, against losses reported in H119. Management guides for a positive operating result in the low single-digit millions for FY20.

Ernst Russ - Ship utilisation remains high

In FY19 Ernst Russ (ERAG) strategically repositioned itself to focus on its investor and asset manager activities in shipping and fund management (particularly real estate). Over the year assets under management (AUM) decreased from €2.9bn to €2.0bn, driven by disposals of non-core business units. Although management expects further improvement in FY20 shipping segment revenue, it is likely to be fully offset by the absence of sold businesses. In light of current adverse markets, it guides to lower overall performance and operating income, although the extent will depend on economic and market conditions. Therefore, the key focus for 2020 is to secure liquidity, targeting stable cash levels over the year.

In FY19 Ernst Russ (ERAG) strategically repositioned itself to focus on its investor and asset manager activities in shipping and fund management (particularly real estate). Over the year assets under management (AUM) decreased from €2.9bn to €2.0bn, driven by disposals of non-core business units. Although management expects further improvement in FY20 shipping segment revenue, it is likely to be fully offset by the absence of sold businesses. In light of current adverse markets, it guides to lower overall performance and operating income, although the extent will depend on economic and market conditions. Therefore, the key focus for 2020 is to secure liquidity, targeting stable cash levels over the year. 

Germany

Ernst Russ AG operates as an asset and investment management firm. The Company focuses its investments on maritime.

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Ernst Russ AG (HXCK GR)

Monday Delight: 10/03/25

Each week, I’ll share five intriguing investment ideas that recently caught my attention. These ideas are meant to spark your research and help...

Contrarian Cashflows

Ernst Russ - Robust results growth

Ernst Russ (ERAG) reported robust results in FY21, with fully diluted EPS increasing fourfold to €0.49 from €0.12 in FY20, as the top line and...

Edison Investment Research

Ernst Russ - Catching the tailwinds

In H121, Ernst Russ (ERAG) continued its fleet expansion with the acquisition of two multipurpose vessels, bringing the number of majority owned...

Edison Investment Research

Ernst Russ - Ship utilisation remains high

In H120, Ernst Russ (ERAG) recorded a 39% increase in revenues, mainly driven by the accounting effect of the full consolidation of the Elbfeeder...

Edison Investment Research

Ernst Russ - Sailing through the storm

In FY19 Ernst Russ (ERAG) strategically repositioned itself to focus on its investor and asset manager activities in shipping and fund management...

Edison Investment Research

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