Ultr seems to have decent ebitda and revenue growth but lacks profitability. With high depreciation and interest expenses, how will we see positive earnings in the near to medium term?
On the revenue side, ultr will probably see additional rev growth from the 3 new psvs coming online within the next 12 months and will generate revenue at over $30k/day each. I guess they also could see growth on the barge selling side.
What other sources of rev growth and operational improvements are there to boost top line and more importantly the bottom line results?
Most of the posts from the past two weeks are on this topic.
In short, i) contract renegotiation on river and offshore, ii) and $100m assets going to work.
However, 2012 is going to be a tight operating year for ULTR. Drought in Paraguay will result in only about half of the soy beans as last year. Look to their river operations during 2009 to forecast for this year. ULTR will have positive operating cash flow, negative net income and decreased yoy revenues this year.
Navios Maritime is the second largest barge operator in Hydrovia. They're guiding 20% increase in $/ton. I haven't heard how old their contracts are. ULTR is guiding ~30% increase in $/ton. Their contracts were written in about 2009 and begin to expire at the end of 2012. Since the contracts were written, a large amount of inflation has occurred in labor and port materials in the Hydrovia region.
You can forecast that offshore revenues and gross margin will improve from the three newbuilt PSVs and the PSVs with expiring charters.
Also, I strongly disagree that ULTR has decent EBITDA and revenue growth. Operating cash flow, working capital and undrawn financing are sufficient to get ULTR through 2012, 2013, but no one is happy with debt/EBITDA ~ 10. Their revenue growth appears to be robust, but realize it's totally from CapEx - added tonnage.
EBITDA and revenue growth will be higher in 2013 through. The other barges on the river are getting paid more per ton of cargo and the other PSVs on the ocean are being paid more per day. When we can readjust the contracts we will. That is an altogether different growth situation than hoping that a company's products are received in the future, or that the Baltic Dry Index will improve.