Rickmers

Rickmers: 3Q14 net loss was at US$53.0m versus a net profit of US$13.1m from the previous year, taking 9M14 net loss to US$27.2m (9M13 net profit at US$31.5m). Bottom-line was weighed largely by one-off provision and impairment losses. Revenue fell 10% to US$33.0m due largely to the reduced charter rates on two vessels which had their charters renewed in 1Q14. A review for vessel and goodwill impairment was undertaken in 3Q14. As such for the quarter, a provision for vessel impairment of US$44.4 m (3Q13: Nil) was applied to six vessels, and goodwill impairment of US$18.6m (3Q13: Nil) was recognised for eight vessel owning subsidiaries. Going forward, Rickmers guides that the charter market for modern container panamax vessels has improved gradually during the reporting period, however, seasonal weakening towards year-end could be expected. A significant number of new ships, mainly very large container ships in excess of 10,000 TEU, are scheduled for delivery in 2015. Despite the high number of ships being scrapped and continued slow-steaming, structural oversupply will remain for some time to come. Nonetheless, the gradual recovery of time charter rates is expected to resume in 2015. A recovery in charter market will eventually affect vessel values positively which had so far remained near historically low levels. Rickmers’ fleet has, through existing charter agreements, US$251.6m of secured revenue between 30 Sep ‘14 and the expiry of the last charter party contract in 2019. The fleet is 100% employed for the remaining part of 2014, with a number of existing charter agreements expiring during 2015. At the current price, Rickmers trades at just 0.4x P/B.