Rickmers Maritime Trust: 2Q10 results. Revenue flat at US$36.4m, but net profit slumped 88% yoy to US$0.6m, due to one-off transaction fees associated with settlement for cancellation of vessel delivery, one-off finance expenses related to restructuring of loan facilities, and unrealized fair value losses on interest rate swaps…
Nevertheless, there are signs that Rickmers could be nearing a turnaround.
i) recovery in the container market is positive, and with Rickmers recording near 100% utilization in 2Q10.
ii) Risk of default and credit tightness appears to be easing as banks granted Rickmers waiver on certain loan covenants, and agreed to refinance its loans,
iii) settlement agreement with Polaris regarding cancelation of US$919m orderbook in exchange for US$64m compensation, subject to sh/h approval at EGM…
Due to past bad news, stock has been under-researched. Possible valuation opportunity, as now trades at 60% discount to reported NAV/sh of US$0.91, and 52% discount to adjusted NAV/sh of US$0.76 (after deducting US$64m compensation). Meanwhile company appears to be maintaining distribution at ~US0.57cts (-5% yoy), which translates to 6.2% annualized yield.
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