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DryShips, Inc. Message Board

  • audiophul audiophul Aug 14, 2012 8:26 AM Flag

    Q2 earnings

    So in Q2, the fleet deployment for the bulkers was pretty solid. All capes were on time charters the whole quarter, so no changes there. Q3 will see one cape time charter end, so the earnings for the class will drop $30k a day. The panas had the same time charters as they listed on the Q1 report for most of Q2 and a surge in spot rates occurred late in the quarter for the class. Q3 will see two good time charters end so that class will drop about $85k daily in Q3 along with the drop in spot rates. All in all, Q2 for the bulkers should come in lighter than Q1, but only by 5-10%. Q3 will see a drop from there of 20% or so as some more ships come on line without time charters adding to expenses but not much towards revenue. Tankers did okay in Q2, no worse than Q1 for sure, but Q3 sucks. So the bulker/tanker segments will be a HUGE drag on Q3 ORIG earnings.

    ORIG in Q2 should do 30-40% more revenues than in Q1. Q3 will probably be even better.

    So while the UDW segment is doing pretty darn good, the shipping segment, especially the spot ships, are just doing terrible.

    George needs to off load old ships, especially the 15 panas built in 2002 or before. He could get maybe $15 million on average for each and not have to lose on them each day as rates are now under operating expenses. They are not likely to recover in the next couple of years at least due to the large number of newbuilds coming against some decent but not great demand growth.

    Expect that the tankers will have bottomed out the end of next year, maybe even start to do fairly well as demolitions take net fleet growth down into low single digits (3.8%) for the crude haulers. This is different than bulkers which are likely to see net fleet growth in double digits (14.7%) for a while yet. Maybe a couple of years even if delayed vessels are pushed into 2013 where the orderbook is likely to be over 1000 vessels by years end anyway.

    Q2 is likely to be better than Q1, but will have seem more headwinds from bulker/tankers. Q3 will likely be softer than Q2 as the headwinds from the bulker/tankers will be more intense and the additional revs likely from ORIG will just not be enough to push ahead.

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    • if every shiper would scrap their 3 oldest ships for 5 million, the BDI would increase to 5500. Its a no brainer. Makes me wish I had enough money to buy up some of these fleets in rough times. Ohhh, wait!!! I do. Thats why I'm long on DRYS.

    • Only question left is will ORIG's expenses rise dramatically.

      My belief is yes. We will see though.

    • rudolph0720 Aug 14, 2012 10:00 AM Flag

      Your extensive analysis causes me to enter an order of 5000@ 2.00....

    • And EGLE says we are in the trough right now. DSX says the bottom is close and I think they are both wrong. The bottom will be next year this time. That's when you can rent a bulker for a vacation and pay less per day than a first class room on a cruise ship.

      • 1 Reply to mwb3210
      • Mw, I think when they said bottom was close.. They forgot to say, you needed to look up to see it.. And as much as that BDI has dropped in the last couple of weeks.. I ain't sure the bottom is still in sight??? About now.. I am wondering does audio speak just to hear his brain rattle!! One decent thought.. The rigs should be doing relitively well!! Well I thought they were doing well 1st qtr.. They reported a loss??? And selling off the older panamax.. That ain't nothing but hogwash!! Who could you sell them to and at what price.. Good concept, but hogwash... Didn't seem nobody even payed attention last qtr, when Geo said he had ordered 4 newbuild panamax, to go along with those other 20 or so already operating on spot?? Well I did.. And I was on here about everyday, saying he must have gone crazy or smoking crack!!!

    • Audio
      Excellent review.
      You keep saying the order books have 1000+ on the docket. I'm reading (Shipping News) that Korea yards haven't had 1 new order this year. China yards can't be any better - where is the new supply coming from?
      If Europe improves a bit this fall does this ever get to 3+ this fall?

      • 1 Reply to majellan03
      • There are orders. The media would have us believe there are none, but there are. I read Tradewinds, Hellenic Shipping News, Nilimar, Compass Maritime, Weber Compass, Fearnleys, Clarksons, etc., etc., and there are orders here and there. Week 30 showed a 207k bulker ordered at STX for $50 million. Also showed 4+4 64k bulkers at Jinling and two more of the same at Hantong. Week 29 shows an 81.3k bulker at Qingdao and a 58k bulker at Tsuneishi. While these PALE in comparison to the orders place in 2006-2008 and then again in 2010, they are hardly NOTHING. There are tankers being ordered here and there as well.

        The HOPE is that zero no new orders will occur and the net fleet growth goes into full reverse. It ain't happening. There are MANY companies that will order to get IN to drybulk shipping for their own book with ship prices so very low. There are many others that need to replace tonnage they use already for their own book and others that need to replace tonnage or even add to it for COAs and time charters already in place. Still others are taking the chance on the new eco designs. Others are placing orders for 2014 and beyond betting on better times.

        So the orderbook grows. It was 637 vessels in January this year for 2013. Today, it's at 872. Some came from delays, but many of the 235 vessels added to the 2013 tally are indeed new orders. And 2014 now has passed 200 dry bulk vessels. That's only about 15 million dwt, but it's a lot more than there were in late 2011 when the number was in the single digits.

    • will drys be a public traded company in 2 years? will drys reverse split are the real questions...

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