Transport Sector, China and Asia-focused Research

Charles De Trenck

Event-Driven

Shipping, specifically LPG tanker shipping, made headlines this week with a takeover offer via an all-stock transaction from <a href="https://www.smartkarma.com/entities/21082" target="_blank" data-smartkarma-citation="entities:21082:1">BW LPG Ltd (BWLPG NO)</a> (in Norway, but controlled by the Singapore-based Sohmen-Pao family) for US-listed <a href="https://www.smartkarma.com/entities/19102" target="_blank" data-smartkarma-citation="entities:19102:1">Dorian Lpg Ltd (LPG US)</a>.For a quick summary of the proposed combined company of BW LPG and Dorian LPG please read the media <a href="https://www.hellenicshippingnews.com/bw-lpg-looks-to-acquire-hadjipateras-led-dorian-lpg-in-a-deal-worth-1-1-billion/" target="_blank">media stories</a> first. Then, for more on the offer direct from BW, please refer to the <a href="http://www.bwlpg.com/Media/May-2018-(1)/BW-LPG-PROPOSES-TO-COMBINE-WITH-DORIAN-IN-ALL-STOC" target="_blank">summary proposed offer</a>.BW LPG is already the largest VLGC (very large gas carrier) player, but there are good reasons for BW LPG to move on Dorian LPG. And there may be additional drivers coming into play.We look at recent history and current issues &amp; drivers in our update.

Shipping, specifically LPG tanker shipping, made headlines this week with a takeover offer via an all-stock transaction from BW LPG Ltd (BWLPG NO) (in Norway, but controlled by the Singapore-based Sohmen-Pao family) for US-listed Dorian Lpg Ltd (LPG US).For a quick summary of the proposed combined company of BW LPG and Dorian LPG please read the media media stories first. Then, for more on the offer direct from BW, please refer to the summary proposed offer.BW LPG is already the largest VLGC (very large gas carrier) player, but there are good reasons for BW LPG to move on Dorian LPG. And there may be additional drivers coming into play.We look at recent history and current issues &amp; drivers in our update.

Shipping Consolidation: BW LPG Bids for Dorian LPG in $1.1bn EV Valuation

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

Nordic American Tankers / Equity Bottom-Up

Losses less than estimates although weak markets likely to prevent a return to profitability: Nordic American Tankers’ (NAT’s) operating revenue for the first quarter of 2018 declined 29.6% year-on-year to USD 66.6m, compared with USD 94.5m during the same period in 2017, and is higher than our estimate of 57.9m. Revenue decreased on account of weak freight rates as the company’s daily vessel earnings plunged to USD 11,200pd from USD 22,700pd in the same quarter last year. Time Charter…

Losses less than estimates although weak markets likely to prevent a return to profitability: Nordic American Tankers’ (NAT’s) operating revenue for the first quarter of 2018 declined 29.6% year-on-year to USD 66.6m, compared with USD 94.5m during the same period in 2017, and is higher than our estimate of 57.9m. Revenue decreased on account of weak freight rates as the company’s daily vessel earnings plunged to USD 11,200pd from USD 22,700pd in the same quarter last year. Time Charter…

Is the One Cent Dividend Enough to Arrest NAT’s Stock Slide?

Equity Research Analyst, Maritime sector, Drewry Maritime Financial Research

Ankush Kathuria CFA, FRM

Equity Research Analyst, Maritime sector

Results south of our estimate as well as consensus: Nordic American Tankers’ (NAT’s) operating revenue declined 16% in 2Q17 to USD 74.4m, and was slightly lower than our estimate of 79.9m from the numbers a year ago. The decrease in revenue was on account of lower daily earnings, which plunged to USD 16,100pd from USD 28,500pd a year ago. TCE revenue plunged 36.6% y/y to USD 39.1m and is south of our estimate of USD 45.3m. The company’s EBITDA nosedived 62.4% y/y to USD 15.3m, and is lower than…

Results south of our estimate as well as consensus: Nordic American Tankers’ (NAT’s) operating revenue declined 16% in 2Q17 to USD 74.4m, and was slightly lower than our estimate of 79.9m from the numbers a year ago. The decrease in revenue was on account of lower daily earnings, which plunged to USD 16,100pd from USD 28,500pd a year ago. TCE revenue plunged 36.6% y/y to USD 39.1m and is south of our estimate of USD 45.3m. The company’s EBITDA nosedived 62.4% y/y to USD 15.3m, and is lower than…

DMFR – 2Q17 Result Update – NAT – Does It Still Deserve Its Rich Valuation?

A sure sign that we are still in the tender underbelly of shipping markets for equities (and that shipping’s recovery is a long drawn out affair) is when a placement manages to contribute to tanking other shares, and shares of the target placement company get hit 15+% as soon as a whiff of placement hits the market.<a href="https://www.smartkarma.com/entities/929" target="_blank" data-smartkarma-citation="entities:929:1">Pacific Basin Shipping Ltd (2343 HK)</a> and its proposed<a href="http://www.pacificbasin.com/upload//e2343_Announcement_RightIssue(18Apr16).pdf" target="_blank">cash raising</a>in the form of warrants issue in April 2016 running through to Summer 2016  was particularly painful:  1) It was the…

A sure sign that we are still in the tender underbelly of shipping markets for equities (and that shipping’s recovery is a long drawn out affair) is when a placement manages to contribute to tanking other shares, and shares of the target placement company get hit 15+% as soon as a whiff of placement hits the market.Pacific Basin Shipping Ltd (2343 HK) and its proposedcash raisingin the form of warrants issue in April 2016 running through to Summer 2016  was particularly painful:  1) It was the…

Bulk's (Shipping's) Thin Market for Placements…Again/Still ...Today Being Diana Shipping's Turn

Nordic American Tankers ( NAT US)- High Spot Exposure to Hurt Revenue and Profitability<ul><li>
Revenue above expectations; earnings in line with estimates: Nordic American Tankers’ (NAT’s) operating revenue excluding a settlement gain of USD 5.3m fell 29.6% y/y in 3Q16 to USD 71.7m (north of our estimate of 58.3m) from the levels in 3Q15. NAT’s revenue fell even though its fleet increased as the average realised freight rate plunged more than 50% y/y to USD 16,700pd. TCE revenue dropped 39.2% y/y to USD…</li></ul>

Nordic American Tankers ( NAT US)- High Spot Exposure to Hurt Revenue and Profitability
Revenue above expectations; earnings in line with estimates: Nordic American Tankers’ (NAT’s) operating revenue excluding a settlement gain of USD 5.3m fell 29.6% y/y in 3Q16 to USD 71.7m (north of our estimate of 58.3m) from the levels in 3Q15. NAT’s revenue fell even though its fleet increased as the average realised freight rate plunged more than 50% y/y to USD 16,700pd. TCE revenue dropped 39.2% y/y to USD…

Nordic American Tankers ( NAT US)- High Spot Exposure to Hurt Revenue and Profitability

United States

Nordic American Tankers Limited is a shipping company that owns and charters Suezmax tankers for oil transportation.  The Company's ships are all active in the spot freight market.

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Nordic American Tankers (NAT US)

Shipping Consolidation: BW LPG Bids for Dorian LPG in $1.1bn EV Valuation

Shipping, specifically LPG tanker shipping, made headlines this week with a takeover offer via an all-stock transaction from BW LPG Ltd (BWLPG NO)...

Charles De Trenck

Is the One Cent Dividend Enough to Arrest NAT’s Stock Slide?

Losses less than estimates although weak markets likely to prevent a return to profitability: Nordic American Tankers’ (NAT’s) operating revenue...

Drewry Maritime Financial Research

DMFR – 2Q17 Result Update – NAT – Does It Still Deserve Its Rich Valuation?

Results south of our estimate as well as consensus: Nordic American Tankers’ (NAT’s) operating revenue declined 16% in 2Q17 to USD 74.4m, and was...

Drewry Maritime Financial Research

Bulk's (Shipping's) Thin Market for Placements…Again/Still ...Today Being Diana Shipping's Turn

A sure sign that we are still in the tender underbelly of shipping markets for equities (and that shipping’s recovery is a long drawn out affair)...

Charles De Trenck

Nordic American Tankers ( NAT US)- High Spot Exposure to Hurt Revenue and Profitability

Nordic American Tankers ( NAT US)- High Spot Exposure to Hurt Revenue and Profitability Revenue above expectations; earnings in line with...

Drewry Maritime Financial Research

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