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Equity Research Analyst, Maritime sector, Drewry Maritime Financial Research

Ankush Kathuria CFA, FRM

Equity Research Analyst, Maritime sector

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

<ul>
<li>Star Bulk recently declared its 4Q18 results and reported a net profit of USD 12.3m in 4Q18 and USD 59m for full-year 2018. The quarterly profit declined from USD 23.9m in 4Q17 due to the realisation of impairment loss of USD 17.8m in 4Q18.</li>
<li>In 2018, Star Bulk acquired 38 vessels through a combination of debt and equity.  After delivery of three newbuildings, the company will own and operate a fleet of 111 vessels versus 71 vessels at the end of 2017. The average age of the current fleet of 108 vessels is healthy at 8.4 years.</li>
<li>The company has booked 70% of the available days of the fleet in 1Q19 at an average TCE rate of USD 12,954pd.</li>
<li>The total indebtedness stood at USD 1.4bn and the cash balance stood at USD 204.9m at the end of 4Q18. Even after accounting for the new debt schedule, the net debt to market adjusted fleet value ratio is at a comfortable 46% for a company of this size.</li>
<li>We maintain our Attractive rating on Star Bulk’s common stock, but have downgraded the fair value of the share from USD 16.70 per share to USD 14 per share.</li>
</ul><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/080/679/original/SBLK_valuation%20overview.PNG?1551436458" class="editor-image img-responsive" data-smartkarma-image-id="80679"></figure><div class="content-caption">Valuation overview</div><p>Source: S&amp;P Capital IQ, Drewry</p>


Star Bulk recently declared its 4Q18 results and reported a net profit of USD 12.3m in 4Q18 and USD 59m for full-year 2018. The quarterly profit declined from USD 23.9m in 4Q17 due to the realisation of impairment loss of USD 17.8m in 4Q18.
In 2018, Star Bulk acquired 38 vessels through a combination of debt and equity.  After delivery of three newbuildings, the company will own and operate a fleet of 111 vessels versus 71 vessels at the end of 2017. The average age of the current fleet of 108 vessels is healthy at 8.4 years.
The company has booked 70% of the available days of the fleet in 1Q19 at an average TCE rate of USD 12,954pd.
The total indebtedness stood at USD 1.4bn and the cash balance stood at USD 204.9m at the end of 4Q18. Even after accounting for the new debt schedule, the net debt to market adjusted fleet value ratio is at a comfortable 46% for a company of this size.
We maintain our Attractive rating on Star Bulk’s common stock, but have downgraded the fair value of the share from USD 16.70 per share to USD 14 per share.
Valuation overviewSource: S&amp;P Capital IQ, Drewry

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