Scorpio Tankers Inc
How Have Hedge Funds Played Crude Oil Tankers?
Trade activity among institutional investors with exposure to crude tankers revealed mixed activity in 2Q15. Certain crude tanker companies on average have generated returns of 38% so far in 2015.
Why Are Oil Tankers Sailing High in 2015?
Oil tankers have outperformed shipping peers, generating in excess of 50% year-to-date on a total return, or price return plus cash returns, basis.
Very large crude carrier demand from Asia on the uptrend
Led by economies of scale over long distances, crude is more likely to be shipped via very large crude carrier.
Navios Maritime Acquisition fleet enjoys profitable charter rates
A strong increase in tanker rates is allowing Navios Maritime Acquisition to secure attractive contract periods for its fleet of charters.
Navios Maritime Acquisition: A balanced chartering strategy
Navios Acquisition’s product tanker chartering strategy focuses on the upside potential by using profit sharing arrangements on most available days.
Navios Maritime Acquisition profit sharing, cash, and dividends
For the full-year 2015, Navios Maritime Acquisition expects to pay dividends of $15.7 million. A 4Q 2014 dividend of $0.05 per share will be paid in April.
Oil price drop leads to higher very-large-crude-carrier rates
As current fuel prices fall below log-time inflation, the adjusted average oil price leads to contango, and that drives VLCC rates higher.
China’s oil consumption projected to keep fleet afloat
Since January 2009, China’s oil imports have more than doubled, at a 16% compounded annual growth rate. It will need ~14 million barrels per day by 2035.
Navios Maritime Acquisition: Earnings and fleet grow in 4Q14
The operations of Navios Maritime Acquisition Corporation (NNA) are managed by Navios Tankers Management, a subsidiary of Navios Maritime Holdings (NM).
Navios Maritime Midstream may enter LPG market
The international LPG shipping market is volatile in profitability, charter rates, and vessel values, adversely affecting businesses during downturns.
Crude oil contango and offshore storage
The drastic drop in crude oil prices created a situation in which the price of near-term crude is cheaper than the price of long-term crude.
Scorpio Tankers prices its public offering of unsecured notes
Lower borrowing costs through KEXIM financing In July 2014, Scorpio Tankers Inc. (STNG) participated in the previously announced offering of $125.2 million in shipping aggregate principal amount of floating rate guaranteed notes due in 2019 (the KEXIM notes). These notes have reduced Export-Import Bank of Korea’s (or KEXIM’s) funding obligations under Scorpio Tankers’ KEXIM credit […]
New buyback program approved by Scorpio Tankers
On July 28, 2014, the board of directors of Scorpio Tankers (STNG) approved a new stock buyback program with authorization to purchase up to $150 million of its common stock.
Scorpio Tankers’ shares in Dorian to be registered for resale
Dorian will be registering for resale, under the Securities Act of 1933 as amended, all the Dorian shares that Scorpio Tankers (STNG) owns. Scorpio Tankers currently owns approximately 9.4 million shares, or 16.3%, of Dorian.
Perfect time for Scorpio Tankers to foray the market
Scorpio Tankers is at the beginning of what could be a strong winter season for product tankers, and the company is extremely well positioned to take advantage of it.
What are the benefits of Scorpio Tankers’ newbuilding program?
Scorpio Tankers’ management believes that with the newbuilding program, the company over the summer finally turned the corner of having more ships on the water than vessels under construction at shipyards.
Scorpio Tankers adopts a shift in charter mix
For the third quarter of 2014, the charter hire expense increased $1.1 million to $32.9 million, from $31.9 million in the year ago quarter.
NNA’s crude tankers and VLCC market fundamentals
Navios Maritime Acquisition’s (NNA) management commented that for 2004–2013, transportation demand—expressed in ton miles—is expected to increase by ~77%.
Navios Acquisition has a cash flow cushion from low breakeven
For 2014, 99.4% of NNA’s fleet is contracted. It’s expected to have a contacted daily charter-out rate of $18,549 per day. For 2015, 56.9% of the fleet is contracted out.
Navios Acquisition has a cautious financial strategy
NNA’s senior notes mature at the end of 2021. There aren’t any debt maturities on bank debt until 2016. NNA estimates that leverage ratios will continue to decrease.
Why NNA’s cash flow bridged after the NAP transaction
As of September 30, 2014, cash and cash equivalents, including NNA’s restricted cash, totaled $72.3 million—compared to $107.8 million recorded as of December 31, 2013.
Navios Acquisition’s positive revenue and net income
With an expanding vessel base and increasing available days, NNA recorded a significant increase in revenue. The company’s bottom line generated profits.
Must-know: NNA’s global growth outlook
Global growth Navios Maritime Acquisition’s (NNA) management cites the International Monetary Fund’s (or IMF) projected growth for 2014 and 2015 at 3.4%, and developing markets growth of 4.6% in 2014 and 5.2% in 2015. Meanwhile, the International Energy Association (or IEA) projects global oil demand growth to rise by 1 million barrels per day to […]
Why the product tanker market is bright
In the product tanker sector, demand for transportation expressed in terms of ton miles for the period 2004 to 2013 increased by almost 77%.
Must-know: NNA’s balance sheet and management outlook
At the end of the second quarter, Navios Maritime Acquisition’s (NNA) total assets amounted to $1.8 billion while total debt stood at $1,252 billion.
Why NNA liquidity position supports company growth and dividends
For the second quarter 2014, NNA’s board of directors declared a quarterly cash dividend of $0.05 per share on its common stock payable on October 2, 2014
Must-know: NNA vessel deliveries enhance material growth
In June 2014, NNA delivered the Nave Neutrino, a 2003-built VLCC (very large crude carrier) of 298,287 dwt (or deadweight tonage), for a purchase price of $43.5 million.
Why NNA’s bottom line dipped due to one-time items
In 2Q14, Navios Maritime Acquisition (NNA) increased its EBITDA (earnings before interest, tax, depreciation, and amortization) by $5.6 million.
Must-know: Scorpio’s transformation to ECO vessels
Scorpio’s product tankers are likely to deliver in 2014–2015, while new vessel orders would be available post 2016.
Must-know: Scorpio Tankers Ltd
Trading at a market cap of $1.84 billion, the company records a dividend yield of 3.71% and a beta of 1.79.
Crude tankers may still do well long-term, but there will be pain
Fundamentals are quite negative if we take a look at older vessels, which are generally more sensitive to short-to-medium-term movements in shipping rates and outlook.
Rising orders for refined oil shipping spell higher rates ahead
On November 8, the overall orderbook for product tankers stood at 12.43% of existing capacity measured in dwt (deadweight tonnage).
Why Capital Product Partners didn’t rally after beating estimates 400%
Beating estimates Let’s begin with earnings since that’s often what analysts and investors look at. For the third quarter of 2013, which was released on October 31 in the morning, CPLP reported basic EPS of $0.35 per share, which was five times more than the estimate of $0.07 per share. Basic EPS of $0.35 a […]
Product tanker rates remain low, weakness among product industry
Shipping rates: A leading indicator The single most important indicator that affects tanker companies’ performance is shipping rates. One well-established index that tracks the price of shipping refined oil across the ocean for representative routes is the Baltic Dirty Clean Index. Compiled daily by the Baltic Exchange for rates settled in the spot market on […]
Why 2nd-hand vessel prices favor Navios (NNA) and Scorpio (STNG)
The importance of second-hand vessel price (values) In addition to new-build prices, it’s also important for investors to follow second-hand vessel prices. Like prices for newbuilds, second-hand vessel price reflect the fundamental outlook for the shipping industry. When prices are rising, they generally portray a favorable outlook for rates. When rates are stable, you can […]
Why the flat oil rig count won’t hinder product tanker demand
US rotatory rig count: The forefront of future oil production The US Crude Oil Rotary Rig Count is a valuable indicator that shows how much drilling activity is occurring in the United States, tracking the number of rotating drills that are drilling into the Earth’s crust in search of oil or developing oil wells. The […]
Why weak September orders led to weak product tanker performance
September was rather a weak month for product tankers. But there’s no sign yet that managers are seeing a cloud over the ocean’s horizon, and the long-term trend remains positive.
Neutral shipping rates mean fleet expansion, driving share prices
Shipping rates affect companies’ revenues The single most important indicator that affects tanker companies’ top-line revenue is shipping rates, which influence profitability margins, earnings, and share prices. So traders and analysts often look at shipping rates. Shipping rates generally fall because of looser supply and demand dynamics. On the other hand, shippers can achieve higher […]
Crude tanker index 25% lower, product tanker index steady
On August 30, the Baltic Dirty Tanker Index and Baltic Clean Tanker Index stood at 622 and 604, respectively.
Weekly product tanker capacity growth rises, crude tanker falls
While annual capacity growth still remains above 3.5% for crude tankers and even higher for product tankers, it has come down since April, which is a positive sign.
Orderbook shows divergence between product and crude tankers
The divergence we’ve seen between orders for product tankers and crude tankers reflects in share prices.
Why Navios and Scorpio have rallied more than 40%
Scorpio Tankers Inc. (STNG) and Navios Maritime Acquisition Corp. (NNA) have performed better this year than other shipping stocks.
Weekly tanker digest: Have fundamentals changed? (Part 2)
Continued from Part 1 The significance of ship orders One measure that reflects managers’ assessment of future supply and demand differences is the number of ships on order. When managers expect future demand to increase more than supply, if they also expect to generate profits with the investment, they will often place new ship orders. But […]
US oil production expected to hit record in 2013, negative for tankers
US oil rig count is a leading indicator of US oil production and oil imports. Since 2008, a boom in US oil industry has negatively impacted demand for tankers (see Tankers will likely underperform dry bulk ships in 2013)— vessels that transport oil across ocean. Higher US oil production, due to application of technologies called […]