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  • tellurium_003 tellurium_003 Aug 5, 2009 11:48 AM Flag

    EXM Reported Eearnings of $1.05/share. Beats Estimate of 8 Cents by 12 Fold!

    EXM Reported Eearnings of $1.05/share. Beats Estimate of 8 Cents by 12 Fold!

    That is a FACT. EXM is dirt cheap here. You either buy today, or walk away and come back to buy at $36 per share later in the year. Your choice.

    This is a blatant short attack and great buying opportunity.

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    • When rates flipped, the liability account balance should have been turned into a contra-asset account(like depreciation) to offset the inflated ship book values, with no amortization.

      This accounting treatment really needs some attention from GAAP. To many people, "GAAP approved" means truthful. The GAAP board surely didn't anticipate how deceptive the current situation would become.

    • Of course no one can answer that, as it depends on rates, the condition of the actual vessel, the financial situation of the owners, the current employment of the vessel, it's status regarding surveys, whether it was refurbished when rates were high to extend its useful life by several years beyond normal service, the prices the breakers are paying for scrap at the time, whether new regulations regarding green scrapping hamper the efforts of the yards....

      12 totalling 550k dwt went in the last 12 weeks. This is basically the result of higher rates. The pace prior to that was probably 3-4 times as high. Several things about the fleet that needs to be made clear. First, smaller coastal vessels are not likely to be broken up at 25 years old. These vessels, often used into their mid 30s, even longer, make up 39% of the number of drybulkers on the water. Next and equally as important, is the number of bulkers built each year is NOT the same year over year. In the years 1981-1986 there were 1581 drybulkers built, averaging 264 per year. 928 of these were under 40k dwt. Handysize and coastal bulkers mostly. Of the large vessels of this vintage and older, they have scrapped several hundred already, several hundred more to go.

      Fine. The problem starts in 1987. 22 years back. These vessels are not quite ready for the breakers. In 1987-1994, only 815 bulkers were built. Averaging 102 per year. AS you can see, it is not as if there are X vessels built each year with X being a constant number leading to a defined number needing scrapped each year as if some magic timer goes off and they head off to the beaches of Chittagong.

      Again, skimming over mainstream media articles that are fast and loose with the facts lead to bad information. Scrapping will take out much of the pre-1987 tonnage over the next two to three years, then it absolutely hits a wall. It will damn near stop, regardless of rates (unless they are below break even for an extended period). Much of the post 1987 tonnage has been refurbished to extend their usefull lives over the past few years. As has as many older one. These perfectly servicable vessels that will easily pass their 5th specials and don't require high maintenance due to their good condition will not likely get scrapped until things get very dire.

      Bottom line, too much tonnage exists, more is coming on line at an increasing pace starting Q3 09 (now) as experienced builders just now start into their orders received in 2006-2007 which have had large payments made and have financing in place with refund guarantees given.

      So, in answer to your question, not enough to offset the coming newbuilds and not enough to keep rates at levels for most owners to do much more than subsist.

    • How mny old ships will be retired in the next two years ?

    • Let me say it again. Ships on order books are ships on paper. They are very different from actual brand new ships made of steel.

      What are the status of the ships on order books? Some of the order entry is probably nothing more than an expression of an intention to acquire a new ship. It is very different from a ship ready to be delivered.

    • And $120-150 MILLION per ship? THAT IS ABSURD!!!! You can order a brand new cape for $65 right now and get it in 2011.

    • You read these mainstream feel good articles and never bother with industry sources. Why is that? Just trying to pump?

    • I could show you, but why not read this instead?

      You should read all the WY reports if you want to know what is really happening in the shipbuilding world. They were a little high, the capacity in 2009 will likely only come in up 45 mdwt and not up 62 million DWT like they projected. Many greenfield yards did not get off the ground due to credit problems. Also, the rest of the capacity comes from the completion of tankers and containerships which were in the way. The huge orders taken in 2006 and 2007 were not slated for delivery until later this year by the established yards with good on-time track records. The pace will pick up substantially. Double what it is now, and 50% more above that in 2010.

    • Show me the math where the steel can come from, where the machineries can come from, and WHERE the ship building capacity can come from, to increase the global fleet by 70% in the next 3 years. More importantly, where does the money come from the finance these ships?

      Nearly 4000 new dry bulk ships, each worth $120M to $150M. That's $600Billion worth of financing, more than half a trillion dollars. Which bank is providing that kind of loans to ship owners?

    • "Those new ships are NOT coming in quantities suppgested by the order book, PERIOD."

      Wow. You figured that out by yourself? So the fleet won't grow by 70% in the next 3 years. No shit. So how many ships have been cancelled? How many of the cancellations have been snapped up by the Chinese? How many "cancellations" were actually never active orders with deposits and refund guarantees and never should have been counted in the orderbook in the first place. How many have really just been delayed at the owners BEGGING and will arrive a little later? And what of the DISMAL pace of scrapping over the past 6 weeks? Are owners really that stupid and greedy to keep running ancient vessels in this time of over supply? Wait, I know the answer to that last one.... EXM IS!!!!! SCRAP the 25 yr old Handies already. Be part of the solution not part of the problem.

    • The new build ships in the order books are ships on paper. They can NOT materialize.

      For a paper ship to become a real ship sailing in the ocean, you need to build them. You need steel, you need machineries, you need electronics. And above all, you NEED banks to finance purchase of those ships.

      Just do the math. Just ask the steel makers and ship builders. Those new ships are NOT coming in quantities suppgested by the order book, PERIOD.

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