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Equity Analyst

Nikesh Shukla

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

<p><strong>Freight rate boost for quarterly earnings:</strong> Golden Ocean’s (GOGL) operating revenue rose to USD 151.4m in 4Q17 from USD 126.9m in 3Q17, on the back of strong vessel earnings. The average TCE earnings for GOGL’s fleet during the quarter were USD 16,444pd, compared with USD 12,928pd in 3Q17. The actual operating revenues of USD 151.4m are in line with our estimate of USD 147m although voyage costs declined more than our expectation, owing to the decrease in the number of vessels on voyage charters. Revenue expansion boosted operating earnings in 4Q17, which increased to USD 67m from USD 41.2m in the previous quarter. In addition to a strong set of quarterly numbers, the other encouraging development was the declaration of the quarterly dividend of USD 0.10 per share, which substantiates the management’s positive outlook for this year, despite the correction in rates in the first quarter. We also believe the ongoing correction in rates is temporary and we should see a rebound post the seasonally weak first quarter. We view the quarterly earnings positively and believe the stock will move up as investors price in the revival in earnings during 2018. We retain our Attractive view, with a fair value of USD 11.50.</p>

Freight rate boost for quarterly earnings: Golden Ocean’s (GOGL) operating revenue rose to USD 151.4m in 4Q17 from USD 126.9m in 3Q17, on the back of strong vessel earnings. The average TCE earnings for GOGL’s fleet during the quarter were USD 16,444pd, compared with USD 12,928pd in 3Q17. The actual operating revenues of USD 151.4m are in line with our estimate of USD 147m although voyage costs declined more than our expectation, owing to the decrease in the number of vessels on voyage charters. Revenue expansion boosted operating earnings in 4Q17, which increased to USD 67m from USD 41.2m in the previous quarter. In addition to a strong set of quarterly numbers, the other encouraging development was the declaration of the quarterly dividend of USD 0.10 per share, which substantiates the management’s positive outlook for this year, despite the correction in rates in the first quarter. We also believe the ongoing correction in rates is temporary and we should see a rebound post the seasonally weak first quarter. We view the quarterly earnings positively and believe the stock will move up as investors price in the revival in earnings during 2018. We retain our Attractive view, with a fair value of USD 11.50.

Golden Ocean - Charter Contracts to Support Earnings Momentum; Maintain Attractive View