Hellenic Carr. Share Discussion Threads

[sivadnoj] 19/7/2010 09:37

Newbuild frenzy at $1bn per week
Adam Corbett London
496 words
2 July 2010
Tradewinds
TRADEW
3
English
(c) 2010 TradeWinds

Tankers are proving most popular in the summer revival.

Shipowners are spending at a rate of more than $1bn a week on newbuildings, according to a TradeWinds analysis of a summer revival of contracting that is set to reverse the decline in orderbooks.

Tanker orders totalling $650m at New Times Shipbuilding Group in China involving Dynacom of Greece is one of the biggest deals so far as Far Eastern yards bid to fill what one broker describes as "great yawning gaps" in yard orderbooks for late 2012 and early 2013.

The same yard says it is ready to confirm more orders shortly ( see story, page 8 ).

Tankers have proven the most popular with AET, NS Lemos and Cardiff Marine finalising contracts for nine suezmaxes worth more than $600m.

Kuwait Oil Tanker Co (KOTC) and Tanker Pacific have ordered eight aframax and panamax products tankers between them. The expectation is that tankers will dominate summer-contracting activity, taking over from bulkers. Kamasarmax-newbuilding investment is still continuing, however, with the latest being a double order from Hellenic Carriers, while Sinotrans has spent over $125m on four panamax bulkers.

One newbuilding broker told TradeWinds: "What we are seeing here is that yards are looking for more orders quickly to keep at least two years' forward cover. Owners are bullish. They saw VLCC rates top $70,000 per day just a couple of weeks ago and they also see that deliveries are tailing off after 2012. They think it's a good time to move." He added: "It also seems they have bought the line from yards that prices will increase because of higher materials costs hook, line and sinker." The ordering frenzy seems set to continue with broker Clarksons pointing out that enquiries are most active in the VLCC, suezmax and aframax sectors. Reflecting the high level of activity prices have firmed with VLCCs up 4%, suezmaxes 8% and aframaxes 12%, according to Clarksons's figures.

The additional orders are already being felt in the weight of orderbooks. Clarksons's tally of capesize bulkers on order has increased from 772 to 784 and for panamaxes from 895 to 914 over the past week alone despite a heavy delivery schedule.

However, one independent analyst says the additional ordering does not make sense given the current state of the orderbook.

He added: "There is a fleet of 550 VLCCs, nearly 200 on order and only 80 that are likely to leave the market in the next couple of years. Do you still think it's a good time to order a tanker?" Chinese shipyards are also expected to dominate the upcoming investment activity with their South Korean rivals having already largely filled their upcoming delivery slots.

Korean finance-ministry figures show that the country's yards have won orders totalling 2.4 million compensated gross tons (cgt) already this year, accounting for nearly half the 5.5 million cgt placed worldwide.

[stemis] 30/6/2010 08:02

It seems HCL are investing the $23.46m proceeds from selling one of its old Panamax vessels



into paying the deposits on 2 brand new Kamsarmax (Panamax) vessels (the deposits are $19.44m with $6.48m payable 3 months later). They have an option on a third.



On a like for like basis it seems a decent deal.

They got $23.46m for a 17 year old 69,601 dwt Panamax, and the brand new 82,000 dwt Panamax's cost $34.2m each. Delivery is 2013, by which time they presumably hope that world trade will be booming again.

[stemis] 08/6/2010 09:13

Sale of Hellenic Breeze announced



Gross sales proceeds $23.46m
Profit on disposal $8.5m

Looks like HCL are planning to acquire other ship(s).

Since the market downturn in early 2009, second hand vessel values have appreciated significantly, hence we consider market conditions favorable for the sale of an older vessel and the renewal of the fleet through investments in modern high quality units. Going forward, Hellenic is well positioned to enhance shareholders' value by exploiting vessel acquisition opportunities as well as new building options that would expand the business in a prudent and timely manner.

[eelanguilla] 03/6/2010 21:34

this is great value - i suspect next year when demand is likely to be higher and the euro currency uncertainty has been resolved, the opportunity to update the fleet once the debt has been repaid would be a top priority.
Industrialisation (sp) and where it is happening across the globe has meant that companies like this that are well run have a reliable market - even if china implodes, the resources are produced at point a and have to go to point b - and vice versa.
Market uncertainty just creates buying opportunities in companies like this ... i like to keep it simple :)

[stemis] 03/6/2010 09:11

David,

I guess that's true in HCL's mind. Take a lower rate fixed for a year rather than rely on short term rates. It presumably also eliminates handover voids (whatever the technical expression is) between charters. The rate is a little disappointing but at least better than it was currently on.

Nickcduk,

Shareholder returns are going to have to come from a re-rating of the shares. Although HCL pays a dividend of 2.47p, which is a yield of 3.7% and which should grow, I don't see a big increase or cash return imminently. I think what is keeping the share price down is the level of debt, concerns over future profits and the large shareholding of the Karamanlis's. The level of debt is falling rapidly and by the end of 2011 will (in the absence of any corporate activity or new vessels) be down to c.$20m. I also think the forecast collapse in profits is overdone.

I do expect some corporate activity - an acquisition or purchase of new vessels - but I've expected that for a while without anything happening! The Karamanlis's have so much invested in HCL that I expect them to take a prudent approach.

[davidosh] 02/6/2010 14:44

I am very happy to see the increased charter rate over last year for the same ship but as the current rates average at around $28000 per day could it be that the lower rate achieved is merely a trade off for the security of a one year plus contract ?

[nickcduk] 02/6/2010 08:50

Thanks for your excellent analysis Stemis. Don't have a position yet but was wondering where you see shareholder returns coming from in HCL. Do you expect them to pay out large chunky dividends or return cash any time soon? My worry as with a lot of companies is that they just re-invest the proceeds and shareholders don't get a chance to monetize any of their investment.

[stemis] 02/6/2010 08:37

M/V HELLENIC SEA TIME CHARTERED AT US$23,300 PER DAY FOR 11-13 MONTHS



Has just come off a charter at $19,000/day, so an increase in annualised revenue (and therefore profit) of around $1.5 million.

[stemis] 28/5/2010 14:20

Wall Street extends rally as OECD raises forecast for global growth



Good news for shipping, I would have thought.

Daily panamax rates seem to be holding up at $30-35,000/day. The average rate received by HCL at the moment is $28,875.

Personally I think the 2011 forecast of 8.2p is very conservative. But then I thought that about 2009 and was proved right!!

[stemis] 14/5/2010 08:56

M/V HELLENIC HORIZON TIME CHARTERED AT US$30,000 PER DAY FOR 5-7 MONTHS



Decent charter. Not just because its $3.7m of guaranteed revenue but also because its above the average rate that HCL achieved in the last financial year. Indicates current level of earnings may be sustainable - P/E of 3!

[g2am] 05/5/2010 23:17

Yeah I think the Greek crisis has something to do with it. I can't see why else it would be this low

[eelanguilla] 05/5/2010 22:57

worth a buy at these levels :)

[deadly] 23/4/2010 14:30

Trading at 75p and 2.47p xd next week. Others shippers have risen sharply recently e.g. GLBS, BMS, CKN. Good chance to top up.

[sivadnoj] 29/3/2010 14:02

Hellenic Carriers says delayed, cancelled dry cargo ships count to grow in 2010 - report
184 words
26 March 2010
ADPnews Shipping
ADPSH
English
© 2010 AII Data Processing Ltd. All Rights Reserved.

(ADPnews) - Mar 26, 2010 - Greek shipping company Hellenic Carriers Ltd (LON:HCL) expects that the number of cancelled or delayed dr-bulk ships scheduled for delivery in 2010 will reach at least 40% out of all orders, Bloomberg reported yesterday.

The reason for so many new units to be delayed or cancelled is the overcapacity on the market, CEO of Hellenic Carriers Fotini Karamanlis said. In addition, both ship owners and yards experience financial difficulties, according to her.

A study of UK based shipping sector intelligence services provider Clarkson Research showed that companies made orders for 1,487 vessels this year scoring an extra carrying capacity record of 122.4 million dead weight tonnes (dwt). Meanwhile, the Baltic Dry Index, which measures commodity shipping costs, fell by 15% from the end of 2009 to February 15, 2010, according to the London-based Baltic Exchange. In the first week of March however, there was a progress of 11% marking the highest rates for the last four months.

[stemis] 16/3/2010 13:31

The average time charter equivalent for the year was $25,910 (that's revenue less voyage expenses). As voyage expenses were about 8.2% of revenue, I'd make daily average revenue about $28,200.

According to



ships of similar dwt seem to be being currently hired at these sorts of rates for 3-6 month charters.

[stemis] 16/3/2010 09:12

Unfortunately I haven't got my spreadsheets with me where I am at the moment so I can'y do any detailed analysis. However EPS was a bit higher than I anticipated at 40c (I estimated 36.7c) but net debt also a bit higher at $66.2m (I estimated $65m). I think the later is due to the outstanding claim of $1.1m plus a bit of other working capital and slightly higher dry docking costs.

Overall I'm happy with the results and that my model seems relatively robust.

My forecast for 2010 was 12.3p (19.7c) and debt down to $47m (now we are getting a dividend of 2.47p). I think that is pretty prudent as I was not expecting much revenue from ships off charter.

Interestingly the current analyst forecast for 2010 is much higher at 19.37p.

Of course the market is looking through the results to 2011 and beyond when most of the ships are off charter. Nonetheless with debt significantly lower by then (down from $92.9m to maybe $40m if the analysts are to be believed) it's very well placed to benefit from the recovery.

Significant to see no write down in ship valuation. NTAV is now 223p a share.

[stegrego] 16/3/2010 07:56

Not much visibility of earnings for 2011 - only 7% chartered.

[wilmdav] 16/3/2010 07:46

I make net debt $66.4m

[kinbasket] 16/3/2010 07:25

Quick scan says 26.5p and net debt at $54m.

Conferance call at 3pm UK, webcast available.

The cash generation here is bonkers.

Back of the net !!

[kinbasket] 15/3/2010 14:15

B4T does post here..

He's sticking with the 26-28p he used here not the 32p he had over there :-)

[sivadnoj] 15/3/2010 10:37

I'd be very happy with 21/22p for a pe of around 3.5! I think Beans is kinbasket on here.