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

Earnings falter on weak spot rates; reduce fair value to NOK 36: BW LPG reported a decline of 8% y/y in TCE income to USD 91.4m in 2Q17, as the decline in spot rates negated the impact of a larger fleet. Daily earnings for VLGCs declined to USD 20,300 in 2Q17 compared to USD 28,100 in 2Q16, and USD 21,000 in 1Q17, while its fleet increased by 12 VLGCs during the same period. A decline in revenues also hurt company’s earnings as EBITDA plummeted to USD 39.6m from USD 52.3m in 2Q16; it was also…

Earnings falter on weak spot rates; reduce fair value to NOK 36: BW LPG reported a decline of 8% y/y in TCE income to USD 91.4m in 2Q17, as the decline in spot rates negated the impact of a larger fleet. Daily earnings for VLGCs declined to USD 20,300 in 2Q17 compared to USD 28,100 in 2Q16, and USD 21,000 in 1Q17, while its fleet increased by 12 VLGCs during the same period. A decline in revenues also hurt company’s earnings as EBITDA plummeted to USD 39.6m from USD 52.3m in 2Q16; it was also…

BW LPG (BWLPG NO) – Supply Pressures Hit Earnings but for How Long?

BW LPG  (BWLPG NO, Neutral, NOK 40) – 1Q17 A better reading than 4Q16, but headwinds persist<ul><li>
Vessel earnings stabilising, but clearly lower than last year:The TCE income was down 31% y/y to USD 94.7m as higher bunker costs exacerbated the losses due to a decline in daily vessel earnings. The average daily TCE earnings for VLGCs in 1Q17 were USD 20,900 compared to USD 38,600 in 1Q16. The positive aspect was that the average TCE for the company’s VLGC fleet was same as 4Q16 despite higher voyage…</li></ul>

BW LPG  (BWLPG NO, Neutral, NOK 40) – 1Q17 A better reading than 4Q16, but headwinds persist
Vessel earnings stabilising, but clearly lower than last year:The TCE income was down 31% y/y to USD 94.7m as higher bunker costs exacerbated the losses due to a decline in daily vessel earnings. The average daily TCE earnings for VLGCs in 1Q17 were USD 20,900 compared to USD 38,600 in 1Q16. The positive aspect was that the average TCE for the company’s VLGC fleet was same as 4Q16 despite higher voyage…

BW LPG  (BWLPG NO, Neutral, NOK 40) – 1Q17 A Better Reading than 4Q16, but Headwinds Persist

Even though the market capitalisation of LPG shipping players has shrunk sharply, the valuations on forward basisare necessarily not cheap. With earnings expectations pared down, investors are unlikely to lap up the LPG shipping stocks, and hence, they will remain range-bound. We do not see investors willing to accord higher multiples, and we believe the share prices could trade within a range. Hence, we have trimmed our valuation forecasts and our base case is a Neutral stance on LPG shipping…

Even though the market capitalisation of LPG shipping players has shrunk sharply, the valuations on forward basisare necessarily not cheap. With earnings expectations pared down, investors are unlikely to lap up the LPG shipping stocks, and hence, they will remain range-bound. We do not see investors willing to accord higher multiples, and we believe the share prices could trade within a range. Hence, we have trimmed our valuation forecasts and our base case is a Neutral stance on LPG shipping…

DMER - LPG Shipping 2.0 - BW LPG, GASS US and NVGS US, Valuations Uncompelling Despite Correction

BW LPG (BWLPG NO) - VLGC Market to Remain Challenging, Dividend Payout Could Eventually Halt<ul><li>
Unexpected low rates result in disappointing earnings: At the start of the year, we cautioned about moderation in the VLGC rates and downgraded the stock to Neutral, but the extent of the fall (from USD 52,000pd in January to USD 14,000pd in June 2016) was unexpected, and VLGCs are burning cash at the current daily rates of about USD 12,000 on the AG-Japan route. The fall in rates has also led to a…</li></ul>

BW LPG (BWLPG NO) - VLGC Market to Remain Challenging, Dividend Payout Could Eventually Halt
Unexpected low rates result in disappointing earnings: At the start of the year, we cautioned about moderation in the VLGC rates and downgraded the stock to Neutral, but the extent of the fall (from USD 52,000pd in January to USD 14,000pd in June 2016) was unexpected, and VLGCs are burning cash at the current daily rates of about USD 12,000 on the AG-Japan route. The fall in rates has also led to a…

BW LPG (BWLPG NO) - VLGC Market to Remain Challenging, Dividend Payout Could Eventually Halt

Norway

BW LPG Limited provides safe, reliable and cost-efficient maritime transportation solutions to customers. The Company links areas of supply and demand globally with its fleet of LPG carriers, which is managed by experienced officers and crew. BW LPG is operating out of Singapore and its fleet operates on a combination of spot voyages, contracts of affreightment, and time charters.

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BW LPG Ltd (BWLPG NO)

BW LPG (BWLPG NO) – Supply Pressures Hit Earnings but for How Long?

Earnings falter on weak spot rates; reduce fair value to NOK 36: BW LPG reported a decline of 8% y/y in TCE income to USD 91.4m in 2Q17, as the...

Drewry Maritime Financial Research

BW LPG (BWLPG NO, Neutral, NOK 40) – 1Q17 A Better Reading than 4Q16, but Headwinds Persist

BW LPG (BWLPG NO, Neutral, NOK 40) – 1Q17 A better reading than 4Q16, but headwinds persist Vessel earnings stabilising, but clearly lower than...

Drewry Maritime Financial Research

DMER - LPG Shipping 2.0 - BW LPG, GASS US and NVGS US, Valuations Uncompelling Despite Correction

Even though the market capitalisation of LPG shipping players has shrunk sharply, the valuations on forward basisare necessarily not cheap. With...

Drewry Maritime Financial Research

BW LPG (BWLPG NO) - VLGC Market to Remain Challenging, Dividend Payout Could Eventually Halt

BW LPG (BWLPG NO) - VLGC Market to Remain Challenging, Dividend Payout Could Eventually HaltUnexpected low rates result in disappointing earnings:...

Drewry Maritime Financial Research

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