Shipping Morning Report

Transcription

1 24 August 217 Shipping Morning Report Company performance last week % chg Singamas Container Navios Maritime Seaspan Corp Evergreen Pacific Basin Hyundai HI Tanker Investments Ltd Nordic American Navios Midstream Diana Containerships Sector performance last days % chg Containers Crude Tankers Gas Shipping Yards/Equipment Dry Bulk Product Chemicals Top- M.Cap perf. M.Cap 1-d YTD Name Cur. Price USDm % % Maersk DKK , CCL USD , RCCL NOK ,951.. Wärtsilä EUR , NCL USD , China COSCO HKD 5.7 8, Keppel SGD 6.3 8, MISC MYR , Hyundai HI KRW 151 7, Hapag-Lloyd EUR , Orient Overseas HKD , Yangzijiang SB SGD , Mitsui OSK JPY 348 3, Samsung HI KRW 19 3, NYK JPY 213 3, STX Pan Ocean KRW 638 3, CSCL HKD , Nakilat QAR , K-Line JPY 29 2, Neptune Orient Lines SGD 1.3 2,469.. SembCorp Marine SGD , Evergreen TWD , China Shipping Development HKD , SITC International HKD , Guangzhou Shipyard HKD , Golar LNG Ltd. USD , Fincantieri EUR , Hyundai Mipo KRW 999 1, CSAV CLP , HMM KRW 86 1, Golar LNG Partners USD , Wan Hai Lines TWD , Teekay LNG Partners USD , GasLog USD , Wilh. Wilhelmsen NOK , Ship Finance Intl. USD , Ocean Yield ASA NOK 68 1, HLNG: 2q17 results in line, upping stake in GDF Suez (HMLP), Ghana/ Chile uncertainty continues SSW: 3-year TC for 2x 1k teu NBs LPG: Highest weekly production recorded / Inventories up c4.5% LNG: Flat w/w Container: Keppel secures two LNG containerships from Pasha Hawaii BEL: 2q17 results ODF: 2q17 results Oil market comment: October Brent is trading at USD 52.56, up 82 cents since yesterday. EIA reported that U.S. crude inventories decreased by 3.3m barrels against an expected decrease of 3.5m barrels. Gasoline inventories fell by 1.2m barrels (expected -1.3m barrels), while distillates fuel inventories remained unchanged. Prices also rose by potential output disruption as the tropical depression Harvey approaches the Gulf Coast. It is expected to make landfall in Texas on Friday and the National Hurricane Centre anticipates it to develop into a hurricane before landfall. Freight rates - Daily Direction d/d Metric Value USD/day Δ d/d Δ m/m Crude/product tankers VLCC: MEG-Feast Firmer WS 7,6 4.1 % -49 % VLCC: Wafr-Feast Stable WS ,.9 % -25 % Suezmax: TD6/TD2 Down 6, % -14 % Aframax: Basket Up 1, % -57 % LR2: TC1 Stable 11, % % MR: Atlantic Basket Down 11, % 7 % Dry bulk Baltic Exchange Dry Index Softer BDI % 26 % Capesize Softer BCI , % 9 % Panamax Softer BPI , % 1 % Supramax Stable BSI 833 9,4 1.1 % 3 % LPG Baltic VLGC Index Stable BLPG ,493.9 % 24 % Freight rates - Weekly Direction w/w Metric Value USD/day Δ w/w Δ m/m LNG k Stable 26,. % % k Stable 41,. % 3 % Container Shanghai Container Freight Index Stable SCFI 86. % 3 % China Containerized Freight Index Stable CCFI 854. % -3 % Sources: Fearnleys, Baltic Exchange, Shanghai Shipping Exchange, Fearnley Securities For relevant definitions, methods, risks, disclosures on potential conflicts of interests etc. and disclaimers (incl. U.S. specific disclaimers) please see important disclosures at All research and investment recommendations should be reviewed in conjunction with the information therein.

2 MMbd ' Barrels Report produced for Ulrich Müller (Belships) MMbd USD /day Höegh LNG (Buy, TP NOK 19) / Höegh LNG Partners (Buy, TP USD 22) 2q17 results in line, Ghana/ Chile uncertainty continues HMLP ups GDF Suez ownership to 73.5% (8x EV/ EBITDA) HLNG delivers an EBITDA of USD 38m in 2q17 and EPS.adj of USD 5 cents, overall in line with expectations. Balance sheet remains rock solid, with expected equity of c. USD m on its USD.7bn NB program. The biggest news is that HMLP acquires 23.5% of the GDF Suez JVs from MOL for USD 27.3m in cash, whilst total EV of c. USD 1m implies EV/ EBITDA of 8x. The deal will add USD 15.5m of annualized EBITDA to HMLP, though will still be reported as equity from associates given board composition. On the project side Pakistan remains on track, whilst Ghana may slip further due to a delay in the FID. Finally, there is little update on Chile beyond that the renewed environmental approval is expected by YE 17. A few weeks ago main sponsor Cheniere noted to be cautiously optimistic on the progress. We continue to be cautious with regards to projected startups, pushing both Ghana/ Chile startups with 6 months compared to guidance. We look for further color on impact and potentially bridging by other vessels/ projects during the call, which is scheduled for 9: CET. LPG: Following two weeks with strong production but high implied domestic consumption and subsequent lower than expected inventory builds; it was a different ball game this time around. Not surprisingly, propane production was high and the 1885k bbl/day produced last week is the highest weekly production ever recorded in the US and represents a 1% y/y increase from the corresponding week in 216. YTD production is now clearly above the 5% mark. Assuming flat production for the remainder of the year would take the run-rate production growth to 7% for the year. Interestingly, we saw inventories starting to build again following a few slow weeks. No clear reason as to why inventory builds have been low in the past weeks but farmers purchasing for crop drying, Enterprise buying up volume ahead of commissioning of new PDH plant and producers using own storages have been potential explanations. Nevertheless, weekly inventories increased by 4.3% this week, taking total inventories above the 7m bbl mark. Mont Belvieu prices softened marginally post inventory release whilst FEI futures were lifted a touch. US Propane production US C3 production/consumption Oct-13 Mar-14 Aug-14 Jan-15 Jun-15 Nov-15 Apr-16 Sep-16 Feb-17 Jul-17 US propane inventories All PADD's 1, 8, 6,, 2, average (LH) 216 Inventory (LH) 217 Inventory (LH) 217 MB Propane (RH) 216 MB Propane (RH) % 14% 12% 1% 8% 6% 4% 2% % -2% -4% C/gallong Oct-13 Mar-14 Aug-14 Jan-15 Jun-15 Nov-15 Apr-16 Sep-16 Feb-17 Jul-17 Source: Fearnleys, Bloomberg, EIA LNG: Rates are flat w/w, with modern spot vessels earning USD 41k/d on avg. According to brokers the tonnage list has few vessels with long term availability, entailing limited period/ discharging flexibility and potentially a tighter market than what the list suggests. Implied US Consumption Baltic VLGC Index vs FS spot rate estimates Production 1-Feb 1-Apr 1-Jun 1-Aug 1-Oct 1-Dec 1-Feb 1-Apr 1-Jun 1-Aug TCE USD/mt 6 USD /mt 2 1 Fearnley Securities - Research 2

3 LNG rates Current Last w eek Change w /w Avg. '14 Avg. '15 Avg. '16 Trend y/y Spot rates 16k cbm TFDE Steady % 145k cbm ST Steady 13 % 1 year TC 16k cbm TFDE Steady 1 % 145k cbm ST Steady 47 % Source: Fearnley LNG, Fearnley Container: Keppel O&M s US subsidiary, Keppel AmFELS has finalized a deal to build two LNG-powered 2,525 TEU boxships for Jones Act containership operator Pasha Hawaii. The contract for both vessels is valued at USD m, with scheduled delivery for the first vessel in 1q2 and the second in 3q2. In addition to the two vessels finalized, Pasha Hawaii has an option for two additional ships of the same specification. The Hawaiian trade lane has seen increased attention over the last month, with TOTE announcing on August 17th that it plans to establish a new domestic shipping service from the USWC to Hawaii from 22, using up to four 3,7 TEU LNG-powered containerships newbuilds at Philly Shipyard. Seaspan Corporation 3-year TC for 2x 1k teu NBs Expect financing of c. 6% upon delivery next year SSW announces 3-year TC s (+3-year option) for its 2x 1k teu NB vessels to be delivered next year. The terms are not disclosed; however we expect rates to be around USD 15-2k/d (prev. OOIL has fixed 3x 1k teu at 18k/d whilst HL fixed 2x 1k teu at USD 13k/d), providing positive EBITDA but not covering interest/ amortization. We expect SSW to draw c. 6% leverage on the vessels (capex of USD 92.5m /apiece) upon delivery. As previously reported, SSW has also sold the 4x Hanjin P maxes for USD 37m, resulting in a gain of USD 14m. Whilst this boosts the company s cash position, we still await news on the 3x 1k teu vessels previously with Hanjin (potential cash call from debt repayment) plus implications from the troubled GCI venture. We estimate current NAV of USD -.5/sh, EV/ EBITDA of 1x and NIBD/ EBITDA of 8x on FY 17 estimates, though we expect the USD 1bn shelf filing to be used actively in the years to come. Capital structure 217E 218E 219E Market cap LT debt preferred stock operating leases NWC and other EV, adj EBITDA,adj EV/ EBITDA 1x 9x 9x NIBD/ EBITDA 8x 7x 7x FCF ex grow th YE'17 YE'18 YE'19 YE'2 Total EBITDA less interest less preferred less debt repayments (ex bullets) less drydock cost FCF pre distributions Current distribution FCF after dividends Fearnley Securities - Research 3

4 Panamax fleet Type Counterparty Charter rate Rem. backlog Seaspan ALPS Panamax 4.5-5k - - Spot Spot Spot Seaspan Kenya Panamax 4.5-5k - - Spot Spot Spot Seaspan Grouse Panamax 4.5-5k - - Spot Spot Spot Seaspan Mourne Panamax 4.5-5k - - Spot Spot Spot Berlin Bridge Panamax 4.5-5k K-Line Firm Firm Firm Budapest Bridge Panamax 4.5-5k K-Line Firm Firm Firm Brotonne Bridge Panamax 4.5-5k K-Line Firm Firm Firm Brevik Bridge Panamax 4.5-5k K-Line Firm Firm Firm Bilbao Bridge Panamax 4.5-5k K-Line Firm Firm Firm Seaspan Lingue Panamax 4-4.5k - - Spot Spot Spot Seaspan Hamburg Panamax 4-4.5k - - Spot Spot Spot Seaspan Chiw an Panamax 4-4.5k - - Spot Spot Spot Seaspan Ningbo Panamax 4-4.5k - - Spot Spot Spot Seaspan Dalian Panamax 4-4.5k - - Spot Spot Spot Seaspan Felixstow e Panamax 4-4.5k - - Spot Spot Spot CSCL Vancouver Panamax 4-4.5k CSCL Asia - - Spot Spot Spot CSCL Sydney Panamax 4-4.5k - - Spot Spot Spot CSCL New York Panamax 4-4.5k CSCL Asia - - Spot Spot Spot CSCL Melbourne Panamax 4-4.5k CSCL Asia - - Spot Spot Spot CSCL Brisbane Panamax 4-4.5k CSCL Asia - - Spot Spot Spot New Delhi Express Panamax 4-4.5k - - Spot Spot Spot Dubai Express Panamax 4-4.5k - - Spot Spot Spot Jakarta Express Panamax 4-4.5k - - Spot Spot Spot Seaspan Saigon Panamax 4-4.5k - - Spot Spot Spot Seaspan Lahore Panamax 4-4.5k - - Spot Spot Spot Rio Grande Express Panamax 4-4.5k - - Spot Spot Spot Seaspan Santos Panamax 4-4.5k - - Spot Spot Spot Seaspan Rio de Janeiro Panamax 4-4.5k HL USA - - Spot Spot Spot Manila Express Panamax 4-4.5k HL USA - - Spot Spot Spot Seaspan Loncomilla Panamax 4-4.5k - - Spot Spot Spot Seaspan Lumaco Panamax 4-4.5k - - Spot Spot Spot Seaspan Fraser Panamax 4-4.5k - - Spot Spot Spot Seaspan Lebu Panamax 4-4.5k - - Spot Spot Spot Kota Maw ar Panamax 3.5-4k COSCON Firm Firm Firm Kota Maju Panamax 3.5-4k COSCON Firm Firm Firm Source: Company data, Fearnley Belships (Buy, TP NOK 7.9) 2q17 results as expected Belships report an EBITDA of USD 3m, in line with FS estimates and previous quarters. Other P&L items spot on previous quarters, leaving a positive net result of USD.7. All vessels performed well in the quarter, leaving no unscheduled downtime for the 1% contracted fleet. Two of three Supramaxes are covered at 16k/day through Aug/May 18/19, whilst the final one rolls of its USD 7.7k/d TC in November (+2m options). For the Ultras, M/S Beliforest (BB-in) is set to roll off next month, whilst M/S Belisland (BBin) is expected to remain on its current USD 17.3k/day TC out to Canpotex through 1q21. Reiterate Buy, TP NOK 7.9. Belships (USDm) 2q17 2q17e Dev 1q17 2q16 Operating revenues EBITDA (adj.) EBIT (adj.) Pre-tax profit Net income, reported Net income, adjusted 1 1 EPS (adj.) DPS..... Fearnley Securities - Research 4

5 Odfjell (Not rated) 2q17 results ODF (Not covered) reports EBITDA of USD 41m versus USD 46m in the preceding quarter. The bottom line came in at negative USD 5m, largely attributable to weaker chemical markets as tank terminal improved marginally q/q. In the quarter, ODF has completed the acquisition of the five CTG vessels as well the full refund for the eight Odfjell Gas carriers was received as expected. Additionally, the company has sold its 35% ownership share in Exir Chemical Terminal as well as the potential sale of the Singapore terminal is reported to have received high interest. On the market outlook, the company reiterates its view that both terminals and chemical tankers will continue to be challenged throughout FY 17, whilst the medium term tonnage oversupply in the chemical tanker market is expected to be gradually offset by higher ton mile demand. Fearnley Securities - Research 5

6 Containers ESTIMATES (FS/CS) VALUATION METRICS PERFORMANCE (%) * Box Ships TEU US USD.1 * Costamare Inc CMRE US USD 678 1, * CSAV VAPORES CLP 1, * CSCL 2866 HK HKD 2,866 18, * Danaos Corp DAC US USD * Diana Containerships DCIX US USD * Evergreen 263 TT TWD 2,4 4, * Hanjin Shipping 1179 KSKRW 12. * Hapag-Lloyd HLAG GR EUR 7,342 14, , * HMM 112 KSKRW 1,457 2,739 8, * K-Line 917 JP JPY 2, Maersk MAERSKB DKK 46,498 57,654 13,32 6,437 7, nm nm MPC Container Ships AS MPCC NO NOK nm.7 Navios Maritime ContaineNMCI NO NOK nm 38.3 * Neptune Orient Lines NOL SP SGD 2, Orient Overseas 316 HK HKD 5,773 8, nm nm nm nm * Seaspan Corp SSW US USD 889 3, * SITC International 18 HK HKD 2,348 2, * Wan Hai Lines 2615 TT TWD 1, nm Wilh. Wilhelmsen WWASA NNOK 1,333 2, * Wilh. Wilhelmsen H. WWI NO NOK 1,1 1, * Yang Ming Marine 269 TT TWD 735 3, nm Sum & weighted average *) 81, ,311 8, , Crude Tankers ESTIMATES (FS/CS) VALUATION METRICS PERFORMANCE (%) * China Shipping Developm 1138 HK HKD 2,359 6, DHT Holdings DHT US USD 545 1, * Euronav EURN BB EUR 1,159 2, Euronav US EURN US USD 1,148 1, Frontline FRO NO NOK 897 2, * Frontline US FRO US USD 922 2, Gener8 Maritime GNRT US USD 374 1, nm nm * International Seaways INSW US USD * KNOT Offshore Partners KNOP US USD Navios Midstream Partne NAP US USD * Nordic American Tankers NAT US USD * Overseas Shiphld. OSG US USD Ship Finance Intl. SFL US USD 1,285 3, Tanker Investments Ltd TIL NO NOK * Teekay Corp TK US USD 787 7, , Teekay Tankers TNK US USD 246 1, nm nm * Tsakos Energy Nav. TNP US USD 369 1, Sum & weighted average *) 12,226 36,224 4,938 3, Dry Bulk ESTIMATES (FS/CS) VALUATION METRICS PERFORMANCE (%) Belships BEL NO NOK nm * China COSCO 1919 HK HKD 8,689 14, * CMB CMB BB EUR 16.2 * Daiichi Chuo Kisen 9132 JP JPY 2 1. Diana Shipping DSX US USD nm nm nm nm nm * Dryships DRYS US USD ####### DS Norden DNORD D DKK nm nm nm Eagle Bulk Shipping EGLE US USD nm nm nm nm nm * Excel Maritime EXM US USD Genco Shipping GNK US USD nm nm nm nm nm Golden Ocean Group GOGL US USD 1,182 2, nm nm nm nm nm * Inui Steamship 9113 JP JPY Jinhui Shipping JIN NO NOK nm nm * Korea Line 588 KSKRW 818 2,32 37, * Mitsui OSK 914 JP JPY 3, Navios Mar. Partners NMM US USD nm nm nm Navios Maritime HoldingsNM US USD 161 1, nm nm nm nm * NYK 911 JP JPY 3, Pacific Basin 2343 HK HKD 91 1, nm nm * Safe Bulkers SB US USD Scorpio Bulkers SALT US USD 56 1, nm nm nm nm nm Songa Bulk SBULK NONOK nm nm nm nm nm Star Bulk Carriers Corp. SBLK US USD 71 1, nm nm nm nm nm * STX Pan Ocean 2867 KSKRW 3,13 4,73 6, * U-Ming Marine Trans. 266 TT TWD 1, Sum & weighted average *) 27,288 34, nm Fearnley Securities - Research 6

7 Product Chemicals ESTIMATES (FS/CS) VALUATION METRICS PERFORMANCE (%) Ardmore Shipping Corp ASC US USD nm nm * Capital Product Partners CPLP US USD Concordia Maritime CCORB SS SEK nm nm d'amico Intl. Shipping DIS IM EUR nm nm nm nm * Hafnia Tankers HAFNIA NNOK * Iino Kaiun Kaisha 9119 JP JPY * Navig8 Product Tankers EIGHT NS NOK 95. Navios Mar. Acquisition NNA US USD 197 1, Odfjell ODF NO NOK Scorpio Tankers STNG US USD 944 3, nm nm nm nm Stolt-Nielsen SNI NO NOK 85 2, Team Tankers TEAM NO NOK Torm TRMDA D DKK 618 1, Sum & weighted average *) 4,517 12,126 1,697 1, Gas Shipping ESTIMATES (FS/CS) VALUATION METRICS PERFORMANCE (%) Aurora LPG AURLPG NNOK nm nm nm nm Avance Gas AVANCE NNOK nm nm nm nm Awilco LNG ALNG NO NOK nm nm 15. nm.4.4 nm nm BW LPG BWLPG NONOK 57 1, nm nm Dorian LPG LPG US USD 372 1, nm nm Exmar EXM BB EUR 365 1, nm nm Flex LNG FLNG NO NOK nm nm nm nm.8.9 nm nm GasLog GLOG US USD 1,346 4, nm nm nm nm GasLog Partners GLOP US USD 941 1, Golar LNG Ltd. GLNG US USD 2,159 4, nm nm nm nm nm Golar LNG Partners GMLP US USD 1,441 2, Höegh LNG HLNG NO NOK 842 1, nm Höegh LNG Partners LP HMLP US USD 612 1, I.M. Skaugen IMSK NO NOK nm nm 22.7 nm.7 2. nm nm * MISC MISC MK MYR 7,563 8, , * Nakilat QGTS QD QAR 2,585 7, Navigator Gas NVGS US USD 571 1, * StealthGas GASS US USD Teekay LNG Partners TGP US USD 1,388 3, Sum & weighted average *) 21,638 44,479 3,7 3, Yards/Equipment ESTIMATES (FS/CS) VALUATION METRICS PERFORMANCE (%) * Bergen Group BERGEN NNOK * China Rongsheng 111 HK HKD * Cosco Singapore COS SP SGD 485 4, nm * DSME 4266 KSKRW 44,8 * Fincantieri FCT IM EUR 1,846 2, * Finetec Corp (LNG) 3 KSKRW 118 4, * Guangzhou Shipyard 317 HK HKD 2,242 4, nm nm * Hanjin HI 972 KSKRW 418 2,319 4, * Havyard HYARD NONOK * Hyundai HI 95 KSKRW 7,56 1, , 2,98 1, * Hyundai Mipo 162 KSKRW 1,765 2,193 99, * Keppel KEP SP SGD 8,317 12, * OSX Brasil OSXB3 BZ BRL * Pipavav Shipyard PIPV IN INR * Samsung HI 11 KSKRW 3,756 6,166 1, * SembCorp Marine SMM SP SGD 2,462 4, * Singamas Container 716 HK HKD * STX Corp 1181 KSKRW 2,385 * STX Engine 7797 KSKRW , * STX OSV SOH SP SGD 212 1, nm * Wärtsilä WRT1V FHEUR 13,69 13, * Yangzijiang SB YZJ SP SGD 4,355 4, Sum & weighted average *) 48,691 7,385 4, , Sources:*Factset, Fearnley Securities *) PE=Sum MCap/Sum Net Income, EV/EBITDA=Sum EV/Sum EBITDA Fearnley Securities - Research 7

8 Commodities Unit Price Perf YTD (%) 1-d 1-w 1-m 3-m 12-m WTI USD/bbl Brent USD/bbl Natural Gas (US) USD/btu Natural Gas (UK) USD/btu LNG Japan (monthly) USD/btu N/A N/A Oil Price development last five years (USD/bbl) 11 Brent vs WTI price differential (USD/bbl) Aug 14 Dec 14 Apr 15 Aug 15 Dec 15 Apr 16 Aug 16 Dec 16 Apr 17 Aug WTI Brent Brent futures (USD/bbl) Oct-17 Mar-18 Aug-18 Jan-19 Jun-19 Nov-19 Apr-2 Sep-2 Current 1 month ago 1 year ago Natural gas price (USD/mmbtu) Aug 14 Dec 14 Apr 15 Aug 15 Dec 15 Apr 16 Aug 16 Dec 16 Apr 17 Aug Henry Hub UK NBP Aug 14 Dec 14 Apr 15 Aug 15 Dec 15 Apr 16 Aug 16 Dec 16 Apr 17 Aug Diff WTI futures (USD/bbl) Oct-17 Mar-18 Aug-18 Jan-19 Jun-19 Nov-19 Apr-2 Sep-2 Feb-21 Jul-21 Dec-21 May- 22 Current 1 month ago 1 year ago UK Nat Gas NBP (p/th) Sep-17 Feb-18 Jul-18 Dec-18 Current 1 year ago Espen L. Fjermestad, Analyst Peder Nicolai Jarlsby, Analyst Lars Konrad Johnsen e.fjermestad@fearnleys.no pnj@fearnleys.no lkj@fearnleys.no