not updated their estimates - bingo. that's been my assumption anyway. they may have internal estimates but what flows to published consensus ... / hey, nice up day.
Well if Fred is the buyer then the earlier reports were off - but that's half normal. Quite the frenzy of VL S&P last couple weeks. 1-yr TCs for VLs just hopped to 47.5 today from 45k, and MR 1-yr rose to 17.25 a couple days ago. WS 70 now on TD2,TD3, and 85 (!) on TD4. Q2 is in the bag - Q3 is looking to start gangbusters. Be interesting to see what AF does with the fresh cash - are VL purchase prices going to bolt?
C-Dream with charter till 2019 and Celeste with 18 months plus another 2 year backstop by NNA at 35k. So we don't see a fresh LTC on a dropdown. $100M with 27m in new subordinated - but they convert to regular after 3 years 1:1.
Esperanza was in the NM fleet per 21 May earnings report, but as a long term charter-in with charter expiration listed as 9/2015. Looks like owner has sold it, not clear which greek buyer took it but NM did not have a preexisting purchase option. "The Japanese-owned Panamax “NAVIOS ESPERANZA” (75,356 dwt, Built Universal 2007, MAN-B&W main engine) is reported sold to Greek buyers for US$ 14.1 million. "
Indeed. Southport reports:
The German-owned VLCC “ENERGY R” (319,012 dwt, Built Hyundai Samo H.I. 2003, MAN-B&W main engine) and her sister “POWER D” (319,012 dwt, Built 2003) are being reported sold to Navios at US$ 43 million each, more or less in line with the last sale of a 2003-built VLCC, “DS VOYAGER” (309,323 dwt, Built Samsung 2003) which obtained US$ 42 million in January.
"BDI has been acting a lot better of late"??? BDI is so far down in the sewer a little vibration can't be taken as doing a lot better. Spot rates are loss-making. Those 12k, 12.5k rates NMM is getting from NM are temporary & artificial - at the end of the charter period NMM will have to settle up with NM. The best thing about bulkers for NMM is that NMM is no longer primarily valued by the bulkers - it's remaining value is mostly in the containers - chartered out for long periods at known cash flows. I like NMM at these levels and expect the next behemoth container transaction to close shortly. That ought to strengthen NMM but may already be baked in. The bulkers I almost write off - we'll be lucky to do much more than break even on those till maybe 2017.
These are the 2 dropdowns that AF talked about in the Conference call. NAP pays cash to monetize the value of the cashflow for NNA. These are VLs with only part of the value in the ships themselves, the other part in the enforceable longer term charters which pay out over time. NAP has lower borrowing costs because it only takes vessels with guaranteed cashflows, so it is in the position to pay NNA a solid value for those cashflows, so NNA gets to cash out. NNA loses a little stability in future cashflow but pockets the money (most of it) up front. The $205m goes not only towards the purchase but also "and to refinance existing term indebtedness." I haven't seen ID of the vessels yet of the purchase prices. I see todays info as a positive, but a small one, in that I already had faith AF would execute exactly as she had indicated in the CC. This is just the confirmation.
Those 12k-12.5k bulker TCs are from the parent, they're artificially high. NM will be sucking up the difference. Gives one pause. Higher chance the bulkers end up impairments. See NM board for more, or listen to NM CC Q&A - starts about 60% through the call. GL.
Agree wrt NM/NMM. Just listened to the call and ugh. Hadn't realized those 12k NMM rates were totally artificial and that NM woud be paying the freight on the difference. That'll thump NM earnings for the duration. Bot a token add yesterday of NM at 3.51 but even this low, might throw them back and reduce further. Delays with the NSALI VALE project don't help, nor does NSALI barge convoy delivery slip. Fall restocking *might* bump BDI but from this low it's all still loss-making. I'm already heavy into NNA, was looking to slide into NM & NMM, but that cross-dealing has given me pause.
Short term bulker rates stink and the payments from the sibs are unchanged. Variable is NSALI but the last of the barge convoys are yet to arrive, so not sure how much it can add as a kick. The bulker outlook is gloomy and more and more of the earlier higher rate charters have rolled off. The sum of the parts argument can be made, but won't juice the PPS. My 2¢. That said NM and NMM are / are becoming attractive for 'buy low' and then be patient.
As long as NNA stays true to it's stated long term plan I'm sticking with it. The yield right now is decent and the longer term fundamentals look to carry the shorter term results up - as AF is able to lock in the better recharters, while profitsharing becomes more reliable and substancial and normal. So yes, with the cashflow allowing the delever, and then that allowing a divi bump, then finally our 3.75 PPS will hop to say 5 as you suggest. Longish road but the plan has been to lock in profitshare for what's chartered and to seek longer term charters at the higher rates when they arrive. So I'll be pleased to see the new charters and then content to let the cashflow wind it's way through. Really nice bumps last 2 weeks in 1-yr rates and the 3-yr not far behind.
Yes! I see WS 80 now on TD2 (AG- SPORE), and 1 yr VL TCs hopped from 40 to 42k. 3 yr still at 40. PS on our VLs will be fine - but much more importantly we have a lot of plain old index exposure - so earnings this Q will BEAT last Q, and last Q was so much better than ever before. Sheesh this is a nice story. Add to that that AF upped her NM stake. NNA is my largest holding. May finally be time to move more $ to my trading account and ease into even larger Navios group holdings. Hey - thoughts on NM itself? Except for the core bulkier fleet all the kids are doing nicely.
I bot my first NMM in years today & a couple days ago. In at 11. I look at the rest of the year for the bulkers and of course they're all loackid in at 12k-12.5k - the recently locked that is. NMM removed the bulker question for the rest of the year, and really it has been transformed, revs wise, to the container sector. There are a few decent earning bulkers, and a bunch at barely breakeven (eg the 12s I mentioned) and 3 that AF pretty much said would be dumped (3 @ 20 yr old) as soon as she could find buyers willing to pay enough she won't keep running them at breakeaven waiting. So count the bulkers at contributing near zip to profits for a couple years. They're commintted to the second 13,100 TEU container earning 60k/day and already the C sector is the main driver. 1.77 /yr for 1.5 yrs to end 2016 has been pretty much promised, and if you bank that then getting in now puts you at a prett ylow basis in 18 mos, and the containers all have years to run - so are the bulkers all going to be impairments? I doubt it. Some impairment - coould be - but most limping along at breakeven and with a potential to rebound a year later - call it a wash. I'll move in slow, but if I have cash to spare and prices languish - then this is definately high on my uy list. GL.
Jerk. Eleanor R was a wonderful role model for women and if he didn't like her because of her views, what, he reverted to attacking her looks?
With some share buyback - which AF did speak about, and some movement to LTCs, and some deleveraging as was her stated #1 use for this surging cashflow, a sustainable div raise will become possible. I don't see it in a quarter, though, next Q i expect to see deleveraging, 1 vessel buy, 2 vessel dropdowns, a rather modest share buyback, and a slight increase in cash. Trub I agree there will be rising analyst estimates - it's almost inevitable now as Q2 fundamentals are so far equal to Q1 and Q2 is not always a great Q for this sector...
Most of the bump from the VLs for NNA comes from straight floating rate charters, too, vs base +PS, so the nice floating rates contributed directly to the bottom line. I like that AF appears reserved in terms of considering potential acquisitiions at this point. Maybe some 1-offs but no megadeals. Opportunistic buys of fresh tonnage, even resales from the yards, to provide liquidity to mixed-fleet owners who really can't afford to leave $ tied up in brand spanking new VLs, and are happy to cash out. Also AF talked about 2 likely dropdowns to NAP, slight dilution of NNAs percentage ownership in NAP, and potential use of the cashflow to actually execute some share buyback. They can do that without altering the very steady cash dividend and AF said she likes to keep that cash div very stable - not risk needing to pull it back. One more ting - yes, longer term charters are in the wings - there's interest by the charterers.
From slide 14: "Four VLCCs on floating rates earned $56,060 on average in Q1 2015".
From what I can see Q2 should be similar - WS rates have held up nicely so far & we're halfway through. Anyone else going to listen to the call?
Turns out the profitshare came mostly from the MRs: "$6.6 million from product tankers; $1.1 million from VLCCs" this surprises me... but could(?) be explained by a lag in PS results from published WS rates. Do they accrue daily? They're paid only periodicly & a vessel voyage finishes quite some time after the charter is arranged, yes?
AF must have has fun saying "We also generated $20.0 million of net income in Q1, significantly more than we have generated in any prior full fiscal year."
So now :almost 90.0% of the available days are covered for 2015 and about 32.0% covered for 2016." This means she hasn't blinked yet in holding off from committing to long term charters. 12 mo VL rates are now very slightly above 3 yr rates & same for the MRs, but the topic of longr term tie-ups is something the analysts are bound to ask, and I'll be interested to hear what she has to say when the CC gets to the Q&A section. CC starts at 08:30. GLTALs.