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What does Chapter 11 and Chapter 7 mean?
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Chapter 11, Title 11, United States Code
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Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to any business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most prominently used by corporate entities. In contrast, Chapter 7 governs the process of a liquidation bankruptcy, while Chapter 13 provides a reorganization process for the majority of private individuals with unsecured debts of less than $336,900.00 and secured debts of less than $1,010,650.00 as of April 1, 2007.
http://en.wikipedia.org/wiki/Chapter_11
Investopedia
http://investopedia.com/printable.asp?a=/articles/stocks/06/bankruptcy.asp
FYI: FDIC's Press Releases: (click the link for more)
JPMorgan Chase Acquires Banking Operations of Washington Mutual
FDIC Facilitates Transaction that Protects All Depositors and Comes at No Cost to the Deposit Insurance Fund
FOR IMMEDIATE RELEASE
September 25, 2008
Media Contact:
Andrew Gray (202) 898-7192
angray@fdic.gov
JPMorgan Chase acquired the banking operations of Washington Mutual Bank in a transaction facilitated by the Federal Deposit Insurance Corporation. All depositors are fully protected and there will be no cost to the Deposit Insurance Fund.
"For all depositors and other customers of Washington Mutual Bank, this is simply a combination of two banks," said FDIC Chairman Sheila C. Bair. "For bank customers, it will be a seamless transition. There will be no interruption in services and bank customers should expect business as usual come Friday morning."
JPMorgan Chase acquired the assets, assumed the qualified financial contracts and made a payment of $1.9 billion. Claims by equity, subordinated and senior debt holders were not acquired.
"WaMu's balance sheet and the payment paid by JPMorgan Chase allowed a transaction in which neither the uninsured depositors nor the insurance fund absorbed any losses," Bair said.
Washington Mutual Bank also has a subsidiary, Washington Mutual FSB, Park City, Utah. They have combined assets of $307 billion and total deposits of $188 billion.
Thursday evening, Washington Mutual was closed by the Office of Thrift Supervision and the FDIC named receiver. WaMu customers with questions should call their normal banking representative, service center, 1-800-788-7000 or visit www.WaMU.com. The FDIC's consumer hotline is 1-877-ASK-FDIC (1-877-275-3342) or visit www.fdic.gov.
Additional Notices
* JP Morgan Acquires All Qualified Financial Contracts as Part of Washington Mutual Acquisition
* Washington Mutual Bank Investors – Additional Information
* Continuation of Contracts Transferred From Washington Mutual Bank
http://www.fdic.gov/news/news/press/2008/pr08085.html
What's Brewing Between China, Vale, and the Baltic Dry Index
by: Hard Assets Investor posted on: September 29, 2008 | about stocks: RIO / SEA
By Julian Murdoch
There's an interesting story playing out between China and Brazil. It's about iron and steel and ships, and it could have a bigger impact than you think.
In early September, Companhia Vale do Rio Doce (RIO) announced that it wasn't happy with the 65% price increase it negotiated back in spring with China for its iron ore contracts for the year that started in April. Vale negotiated separate price increases for its European and Chinese customers, and apparently, they're regretting that.
One would think that once the negotiations are concluded and the contract signed, that would be that. At least, that's how things usually work for me. But as any lawyer would tell you, you can always try to renegotiate. That's what Vale is working on.
Here's the logic: At the time of the original deal, when the then unheard-of increases in the price of iron ore were negotiated, steel makers knew a price increase was coming. Supply was low, demand was high and the iron ore companies were facing increasing costs as energy prices skyrocketed. The steelmakers weren't happy, but they understood the score. They went into the negotiations knowing they were facing a price hike - it was just a matter of keeping it to something they could afford.
The steelmakers themselves were also facing increasing energy costs and had to account for increasing transportation costs as shipping costs rose due to high fuel prices. Demand was high for dry bulk ships, and Chinese companies were stuck paying the high rates because they needed the iron ore (and coal, and the other commodities that travel on those slow boats to China). Apparently the Chinese steel makers were able to negotiate a slightly lower price for their iron ore by crying poor - they had to pay higher shipping prices to get the ore from Brazil to China.
Well, since then, the bottom has dropped out of the shipping market, and Vale wants a mulligan.
Vale is asking for a price hike of around 11% in order to bring the price of iron ore shipped to China in line with ore that's sold to Europe, on the idea that shipping costs have come down, which they have. When I wrote about the Baltic Dry Index a few weeks ago, it was down 50% from its early summer high. Make that 67% today.
Chart: Baltic Dry Index performance June '08 to Sept. '08
Last week alone, the index dropped 25% due to global economic worries (shipbuilding takes credit) as well as this little tussle between Vale and China. Perhaps the long-horizon shipping collapse analysts have been predicting (which we wrote about before) has arrived quicker than anticipated. Or maybe this is an opportunity to get in the Claymore/Delta Global Shipping Index ETF (SEA) near the bottom.
Since this all began, China has accused Vale of slowing down the loading of iron ore bound for China, tying up ships and reducing China's iron ore imports in an attempt to pressure China to accept the price increase. Vale has, of course, denied both the Chinese allegation and a report by Lloyd's List claiming the same thing. (Color me skeptical, but the classic Teamster-slowdown tactic has been around since Sumerian slaves weren't happy with the gruel.)
Roger Agnelli, CEO of Vale, spoke Friday at a sustainability forum hosted by the company. Here are few of the relevant sound bites (courtesy SmartMoney):
There has been no cut in shipments. We have zero tons of iron ore at our ports.
Despite the grammatical challenge presented here, isn't this a contradiction? Is Agnelli saying that they are shipping everything that is coming out of the ground in an attempt to prove that Vale has not cut shipments? Or is he stating that Vale has not cut shipments in the past, but that may not be true in the future because Vale has no inventory to ship? If it is the latter, we might want to cast a skeptical eye on Vale's forward earnings.
In defense of the price increase, Agnelli said:
In practice there will be no rise for the Chinese because the fall in freight prices will compensate them. Shippers are strongly arbitrating freight prices. China is shouting and crying but is losing nothing.
Then there is this beauty:
If Vale stopped selling ore to China, then the Chinese steel industry would stop.
Talk about biting the hand that feeds you! This is Chicago-level hardball. Vale's main iron customer is China, and we all know that China demand is driving steel growth.
But does China need the ore right this second? Perhaps not. Prior to the Olympics, China stockpiled all sorts of materials. Imports of iron ore for the first eight months of this year were 23% higher than for the year prior. With many steel mills closed during the Olympics due either to energy restrictions or pollution control, that ore didn't get used. On September 18, vice chairman of the China Iron and Steel Association Luo Bingshen said that there were 80 million metric tons of ore in Chinese ports. More recently, the association reported demand growth for steel products is slowing - growing only 6% last month, as opposed to the 13% growth seen the year prior. Blame it on rough times in the global economy and decreased auto sales.
Chinese steelmakers ‘have shown no interest' in reopening plants because of ‘languid' demand from customers such as carmakers and builders, Bank of America Corp. analysts Michael Pak and James Lee said in a Sept. 22 report. Demand from China may also be hindered by National Day holidays that run for a week from Sept. 29. [Bloomberg]
What does this all mean for Vale?
Vale's stock price is down 52% from the high it hit on May 16, and down 38% YTD.
Chart: NYSE: RIO performance, Sept '07 to Aug '08
Of course, with everything going on in the markets right now, we can't say that this decline is in any way because of the China negotiations - a lot of companies have similar landslide-of-shame charts.
With its third-quarter report due out on October 23, we will need to wait and see how the company has fared during this renegotiation and what the market thinks it is worth.
If China can get the ore it needs from local mines and other suppliers as it has threatened to do, and continues to resist Vale's pressure, negotiations for next year's contract which begin in November will be interesting, to say the least.
This article has 4 comments:
*
Chris B
Sep 29 02:24 PM
The link to a discussion of falling shipping rates was the most useful thing to me.
Anyone think Vale is trying to pressure the Chinese into buying them? Report abuse
*
John Egan
Sep 29 05:11 PM
Chris B... Interesting question... It has been rumored frequently that RIO, PCU and AA are all on the Chinese 'buy' list... Shame I keep getting stopped out of each of these..
Vale has a lot going for it... In particular, they have their own land transportation system in place... And, they have ordered their own small fleet of transport ships. It would seem they are trying to circumvent the 'cost of transportation' issue. Admittedly, the ship order could be cancelled if the economy keeps tanking...
After today, I'm wondering if I might be able to get some of these fine companies for under $10 a share... ??? OK... Just joking... I hope!
jegan Report abuse
*
Socialism
cannot
compete!
Sep 30 02:14 PM
No way Vale gets bought by China...Brazil is making all the right moves with its key infrastructure players right now -- RIO and PBR are both critical cogs in the government's plan for economic prosperity several generations down the road. They will not let it happen. Report abuse
*
BlueDog
Sep 30 07:17 PM
My Website
Nice synopsis of the situation. It would have been nice to have heard your thoughts on probable outcome.
http://seekingalpha.com/article/97840-what-s-brewing-between-china-vale-and-the-baltic-dry-index?source=yahoo
Muslim Ramadan occurred this year same time as the Chinese holidays, and Ramadan has always slowed somewhat down the goods transport. In addition China and India have almost stopped buying coal and iron, because the Aussies and Brassies have lifted their prices again. How long their boycott will last - nobody knows - but as always, when they begin to buy everybody wants their goods now and fast, and the bulker prices surge upwards.
Strange would it be if it shouldn't happen also this time.
SDRL - Seadrill secures new contract for West Alliance
(Up in Oslo 4.65% NOK123.75 = USD 21.41)
Seadrill has been awarded a five year firm contract for the semi-submersible tender rig West Alliance for operations in South East Asia. Contract commencement will be in January 2010 in direct continuation of existing contract. Total contract value is estimated to approximately US$310 million.
Analyst contact:
Jim Dåtland,
Vice President Investor Relations
+47 51 30 99 19
Media contact:
Trond Brandsrud,
Chief Financial Officer
+47 51 30 99 19
Seadrill Limited
Hamilton, Bermuda
September 18, 2008
Published: 08:36 18.09.2008 GMT+2 /HUGIN /Source: Seadrill Limited /OSE: SDRL /ISIN: BMG7945E1057
GOGL - Mandatory Notification of Trade
NOK 20,00 in Oslo = USD 3.46
Golden Ocean Group Limited ("Golden Ocean" or the "Company") advises that the Company has re-purchased $8,000,000 of nominal value of Convertible Bonds with ISIN NO 0010403892 (the "CBs") at a price of 84.75 per cent per bond.
As of today Golden Ocean owns $8,000,000 of CBs representing 4% of the total outstanding issue.
September 19, 2008
Hamilton, Bermuda
Contact Persons:
Herman Billung: CEO, Golden Ocean Management AS
+47 22 01 73 41
Geir Karlsen: CFO, Golden Ocean Management AS
+47 22 01 73 45
Published: 07:06 18.09.2008 GMT+2 /HUGIN /Source: Golden Ocean Group /OSE: GOGL /ISIN: BMG4032A1045
Baltic Index keeps falling, now stands at an 18-month low
Tuesday, 16 September 2008
Pressures keep on piling up for the Baltic Dry Index (BDI), after an already prolonged period of downfall. The Baltic Exchange's chief sea freight index (BDI) for global raw materials trade sank to an 18-month low on Monday, losing another 53 points, or 1.1 percent, closing to 4,747 points. It had already lost 1,000 points last week, bringing it down by 56% since an all time high of more than 11,000 points by the end of May. The rise had been fuelled by a booming demand for commodities, mainly from China, which at the time sought to increase its stockpiles, ahead of the Olympic Games in Beijing.
With stockpiles still high, China has halted imports for the time being.
The latest developments in the world’s economy and stock markets certainly aren’t helping the situation, at least in terms of market sentiment, with spot cargoes activity being persistently thin. In a report late last week, compiled by Mr. George Grigoriadis, financial analyst for shipbroker George Moundreas stressed out the increase of stockpiles of iron ore at China’s major ports, now standing at 70 million tons. This development is hindering even a brief boost of demand for dry bulk carriers. At the same time, China’s oil demand has increased by only 700,000 barrels per day, against a double increase of 1.5 million barrels per day during the previous years. As a result, freight rates for tankers have been kept at 2006 levels.
Yesterday’s financial news were devastating in terms of investors’ sentiment, with Lehman filing for bankrupsy, world stock markets tumbling down, followed by oil prices, which maybe the only positive development for providing a lifeline in the world’s economy.
Back to shipping, Peter Norfolk, director at Simpson, Spence & Young (SSY), a shipping consultancy in London, was quoted by Reuters as saying that commodity prices keep falling, as falling global port congestion had hit prices. According to SSY figures, the number of capesize merchant ships queueing to load/unload in Brazil, Australia and China had shrunk by the equivalent of 4 percent of the capesize fleet since June. "That's more than the year-to-date on new deliveries (to the fleet) so it's a substantial swing," Norfolk said. Amid this environment, shipping activity couldn’t remain unaffected, given that it is directly linked with the course of global trade and economy.
Nikos Roussanoglou, Hellenic Shipping News
Seadrill ($20.75) sells/leases back rigs, sets dividend
Tue Sep 16, 2008 3:03am EDT
OSLO, Sept 16 (Reuters) - Norway's offshore services group SeaDrill (SDRL.OL: Quote, Profile, Research, Stock Buzz) said:
* It has agreed with Ship Finance International (SFL.N: Quote, Profile, Research, Stock Buzz) a combined sale and leaseback arrangement, whereby Seadrill sells its ultra-deepwater semi-submersible rigs West Hercules and West Taurus for $1.7 billion and simultaneously leases the units for a 15-year period.
* The up front cash contribution from the sale, adjusted for remaining newbuild instalments, is estimated at $1 billion at delivery of the two semi-submersible rigs.
* It has with this lease arrangement, in combination with future cashflow generation, secured necessary financing of the entire newbuild programme.
* The sale and leaseback transaction is an important step in realizing Seadrill's leveraged financing strategy and decided to distribute an extraordinary cash dividend of $0.30 per share. Seadrill shares will trade ex-dividend on Sept. 22, 2008.
* If it applied similar arrangements for all the remaining eight deepwater units, Seadrill could release cash in excess of $5 billion. This is however dependent on availability of debt financing sources and relevant covenant structures. (Reporting by Wojciech Moskwa)
Here it is! Let's wait and see for what follows.
It's still only a rumour, but something must be happening.
TradeWinds:
"Ready to sell?
John Fredriksen would offload Frontline spinoff with buyers getting a dollar for 50 cents, top analyst says.
Independent Tankers Corp (ITC) is in prime position for a takeover after its spinoff from John Fredriksen’s Frontline failed to meet expectations, a leading analyst says.
, 09:54 GMT, 11 September 2008"
Carnegie in Oslo wrote Sept. 4 that ITCL is a "Fredriksen's Doubler".
"Carnegie operates with a 15 Krona target for ITCL" writes Dagens Næringsliv (Hegnar Online 4.9.2008)
8.00 NOK = $1.39 now in Oslo (very thinly traded lately).
GOGL - Delivery of newbuilding
($3.75 last trade in Oslo)
Golden Ocean Group Limited ("Golden Ocean" or "the Company") is pleased to announce that the Company have taken delivery of the second capesize newbuilding contracted in December 2006 from Daehan Shipbuilding Co., South Korea.
As announced on January 8, 2008 the vessel is sold to a third party and the vessel is now successfully delivered to the buyer. The transaction will give a positive result of approximately $46 million, and this will be recorded in Q3 2008.
September 12, 2008
Hamilton, Bermuda
Contact Persons:
Herman Billung: CEO, Golden Ocean Management AS
+47 22 01 73 41
Geir Karlsen: CFO, Golden Ocean Management AS
+47 22 01 73 45
Published: 09:00 12.09.2008 GMT+2 /HUGIN /Source: Golden Ocean Group /OSE: GOGL /ISIN: BMG4032A1045
Hello Milner,
I have been travelling and having vacation (!), so I have not paid much attention to the markets. I have not heard anything special about ITCL, but it is quite possible that JF is considering selling tankers. That popped in mind, when FRO did not distribute more ITCL shares in last quarter report. I'll try to find more information
First half of the year was much stronger that expected in the tanker market, especially in VLCC's.
Take a look at VLCC, Suezmax and Aframax first half summaries:
http://www.mcqservices.com/
(Must log in but it's free!)
Agree! Seadrill is in good hands...
SDRL - Contract extension for T9
NOK 145.50 = $26.65 in Oslo now
The Seadrill operated tender rig T9 has been awarded a three-year contract extension with ExxonMobil. The contract extension value is approximately US$152 million. Commencement of the extension is scheduled to mid January 2009.
Seadrill controls 49 percent in Varia Perdana which owns the T9 tender rig.
Published: 08:44 01.09.2008 GMT+2 /HUGIN /Source: Seadrill Limited /OSE: SDRL /ISIN: BMG7945E1057
SDRL - New 18 months contract for jack-up rig in Vietnam
Seadrill has been awarded a contract by VSP in Vietnam for the jack-up rig West Ariel. The assignment is for the drilling of 10 wells with expected duration of 18 months. Total contract value is estimated at US$105 million.
Published: 08:40 01.09.2008 GMT+2 /HUGIN /Source: Seadrill Limited /OSE: SDRL /ISIN: BMG7945E1057
SDRL - Seadrill reports second quarter 2008 results
In Oslo now NOK 149.50 = USD 27.79
Highlights
Seadrill reports net income of US$210 million and earnings per share of US$0.53 for the second quarter of 2008.
Seadrill takes delivery of three newbuilds (one jack-up, one tender rig and one drillship).
Seadrill secures contracts worth US$4.8 billion.
Seadrill orders four jack-up newbuilds for delivery in 2010 for US$850 million.
Seadrill orders new semi-submersible rig for US$640 million.
Seadrill orders new self-erecting tender rig for US$210 million.
US$80 million gain on sale of jack-up West Titania.
Seadrill resolves to distribute cash dividend of US$0.60 per share.
Seadrill secures US$2 billion in financing including the sale and leaseback arrangement for West Polaris.
Seadrill commences operations with deepwater newbuild West Sirius in Gulf of Mexico in July.
Second quarter results
Seadrill today reported consolidated revenues for the second quarter 2008 of US$603 million compared to US$438 million for the first quarter 2008. The revenues was impacted by gain on sale of US$80 million related to the disposal of the jack-up rig West Titania. Revenues for the first half year were US$1,041 million.
Operating profit for the second quarter was US$132 million as compared to US$110 million in the first quarter (excluding gain on sales). Operating profit for the first half year was US$242 million (excluding gain on sales).
Operating profit from the Mobile Units amounted to US$90 million as compared to an operating profit of US$74 million in the first quarter 2008 (excluding gain on sales). The increase was mainly due to higher contribution from the drillship West Navigator.
Operating profit from the Tender Rigs amounted to US$25 million, which was in line with the preceding quarter.
Operating profit from Well Services amounted to US$17 million as compared to US$10 million in the first quarter 2007. The improvement reflects higher overall activity as well as positive contribution from the newly acquired companies.
Net financial items for the second quarter resulted in an income of US$7 million, a decrease of US$155 million. The first quarter included gain on sales amounting to US$148 million.
Income before income taxes amounted to US$219 million.
Income taxes were US$3 million.
Net income for the quarter amounted to US$210 million.
Earnings per share were US$0.53 for the second quarter.
For further information, please see the second quarter 2008 report attached.
http://hugin.info/135817/R/1247095/269956.pdf
Published: 16:40 28.08.2008 GMT+2 /HUGIN /Source: Seadrill Limited /OSE: SDRL /ISIN: BMG7945E1057
ITCL - Notification of trade
Bengt Neteland, Vice President Finance in Frontline Management AS, has on August 27, 2008 acquired 35,000 shares in Independent Tankers Corporation Limited (ITCL) at a price of NOK 8.00 per share. After this trade, Mr. Neteland owns 65.000 shares in the company. In addition, Mr. Neteland has options for 1.000.000 shares.
Oslo, 28 August 2008
Published: 09:02 28.08.2008 GMT+2 /HUGIN /Source: Independent Tankers Corporation Limited /OSE: ITCL /ISIN: BMG4758V1000
Dockwise Ltd: H1 2008 - a sustained strong start to the year
DOCKF.PK USD 3.30
Financial highlights Q2
* Revenue up 63.1% to USD 115.9 million (USD 71.1 million Q2 2007)
* Adjusted EBITDA* up 69.1% to USD 55.2 million (USD 32.7 million in Q2 2007)
* Adjusted Net Profit** of USD 19.4 million (USD 1.0 million in Q2 2007)
* Record backlog for Dockwise Heavy Lift (DHL) of USD 309 million
o up 110% on Q2 2007 (USD 147 million);
o up 17% on Q1 2008 (USD 264 million);
o backlog extends into 2011.
Strategic and operational highlights
* Steady growth in Offshore, T&I and Onshore backlog, increasing revenue visibility and stability
* Talisman and Treasure delivered according to schedule
o growth in fleet contributing to improved schedule efficiency;
o sustained vessel utilization rates.
* Fleet expansion:
o Triumph and Trustee: delivery by end 2008;
o Mighty Servant 3: delivery December 2008.
* Strong cost management: SG&A reduced despite industry cost pressures and key marketing investment
* Successful tendering secures major long term awards post period end
o Koniambo; Vyborg (LOI); Navantia
o Substantial backlog additions
* Q2 2008 includes three months compensation (USD 6.3 million) for Mighty Servant 3 (see appendix).
** The Q2 2008 Adjusted net profit excludes the amortization of backlog (USD 0.5 million) related to 2007 transactions.
Andre Goedee, CEO of Dockwise Ltd., commented:
"Dockwise has sustained its good operational and financial performance into the second quarter and we are pleased to report a marked strengthening in long term backlog as our strategy of targeting major tenders in the Offshore, T&I and Onshore sectors, yields success. The quarter has also been marked by excellent cost management in the face of industry-wide inflationary pressures. This is a vital discipline as Dockwise further develops its global sales and marketing force to service the fleet. Despite volatility in short term contract lettings, the management team continues to see a strong outlook for the company."
A teleconference for analysts and investors following the presentation of H1 2008 results will be conducted on 28 August 2008, at 13:00 CET; 12.00 GMT (UK); The dial in number for the conference is +44 (0) 20 3003 2666. The teleconference will be live audio-webcast on the Company's website www.dockwise.com.
For further information please contact:
Fons van Lith
Tel : +14415991818
fons.van.lith@dockwise.com
Click the link below to read the entire release including all annexes:
Q2 Results 2008
http://hugin.info/137711/R/1246779/269694.pdf
Published: 08:00 28.08.2008 GMT+2 /HUGIN /Source: Dockwise Ltd /OSE: DOCK /ISIN: BMG2786A1062
I am very glad that Tor Olav Trøim is now Chairman of ITCL Board. Their statement that the Board is working on "the value of the underlying assets" reassures me that they have plans for this company too.
I was expecting that FRO distributes more ITCL shares, but apparently they want ITCL to be a stronger company before they distribute more of its shares.
DSSPF.PK $3.25 Deep pockets
John Fredriksen’s offshore owner Deep Sea Supply piles on profit in second quarter as fleet grows.
The growth of its platform supply vessel (PSV) fleet helped Deep Sea Supply (DESS) to a profit increase in the second quarter.
The high level of exploration and production activity worldwide bolstered the Oslo-listed owner although spot rates slackened off in the North Sea.
........
, 09:02 GMT, 27 August 2008
GOGL/GDOCF.PK - Consolidated Financial Statements for the year ended December 31, 2007
Golden Ocean Group Limited announces the filing of its Consolidated Financial Statements for the year ended December 2007.
The Consolidated Financial Statements for the year ended December 31, 2007 can be found on our website at www.goldenocean.bm and in the link below.
August 27, 2008
The Board of Directors
Golden Ocean Group Limited
Hamilton, Bermuda
Consolidated Financial Statements 2007
http://hugin.info/135378/R/1246508/269569.pdf
Published: 09:59 27.08.2008 GMT+2 /HUGIN /Source: Golden Ocean Group /OSE: GOGL /ISIN: BMG4032A1045
ITCL - Q2 Presentation 2008
27/08-2008 14:31:00: (ITCL.OTC)
Independent Tankers Corporation Limited (the "Company") advises that
a presentation of its second quarter 2008 results, that were
released August 27, 2008, is available on the Company's website:
http://www.itcl.bm and in the link enclosed.
Hamilton, Bermuda
August 27, 2008
Ekstern link: http://hugin.info/138953/R/1246637/269609.pdf
ITCL - Second Quarter 2008 Rersults
NOK 8.00 = USD 1.49 now in Oslo
Highlights
# Independent Tankers reports net income of $3.5 million, equivalent to earnings per share of $0.05 for the second quarter of 2008.
# Independent Tankers reports net income of $7.2 million, equivalent to earnings per share of $0.10 for the six months ended June 30, 2008.
# In June 2008, Chevron Transport Corporation chose not to declare the termination option for the VLCC Phoenix Voyager.
Introduction
Independent Tankers Corporation Limited (the "Company" or "Independent Tankers") was incorporated on Bermuda on January 18, 2008 and the shares have traded in the Norwegian over-the-counter market since March 7, 2008. Independent Tanker's business is mainly concentrated around the ownership and operation of crude oil tankers on long term bareboat contracts, which include certain cancellation options to major oil companies. Independent Tankers owns or leases six VLCC's and four Suezmax tankers. All vessels are financed through bonds in the US market and some of the vessels are also subject to financial lease arrangements. Our main shareholder Frontline Ltd. ("Frontline") owns approximately 83% of the Company.
Second Quarter and Six Month Results 2008
The Board of Independent Tankers announces a net income of $3.5 million, equivalent to earnings per share of $0.05 for the second quarter of 2008. This compares with a net income of $4.0 million, equivalent to earnings per share of $0.05 for the second quarter of 2007 based on predecessor accounts.
The average daily bareboat rate earned in the second quarter by the Company's VLCCs and the Suezmax tanker Front Voyager were approximately $26,100 and $7,900 respectively compared with approximately $26,100 and $8,000, respectively in the preceding quarter.
For the six months ended June 30, 2008 the Company announces net income of $7.2 million, equivalent to earnings per share of $0.10 (2007 comparable six months $7.3 million, equivalent to earnings per share of $0.10). Net interest expense was $12.2 million (2007 comparable six months: $13.0 million). At June 30, 2008 all of the Company's bond debt of $390.5 million is fixed with interest rates ranging from 6.56% to 8.52%.
As all cash is restricted there was no movement in cash and cash equivalents in the quarter. In August 2008, the Company has an average cash breakeven rate for its VLCCs and Suezmax tanker of approximately $21,400 and $4,900 per vessel, respectively.
Charter development
In April 2008, Front Voyager, Inc., a subsidiary of Frontline, has extended the charter party with Calpetro Tankers (Bahamas III) Ltd. for the single hull Suezmax tanker, Front Voyager, for one year from April 1, 2008 at a bareboat rate of $4,242 per day on a cash basis. The charter party is being accounted for as a four year operating lease from April 1, 2006 and the estimated income is being amortized on a straightline basis giving a rate of $7,900 per day.
In June 2008, Chevron Transport Corporation chose not to declare the termination option for the VLCC Phoenix Voyager, and the vessel will continue to be on a bareboat rate of $28,500 per day until March 2011.
Other Matters
In July 2008, the Board of Independent Tankers approved a grant of 300,000 share options to the board member Ajay Khandelwal, with a subscription price of NOK 10.0 per share. The options vest one third each year over three years, and the option period is set to five years.
74,825,166 ordinary shares were outstanding as of June 30, 2008 and the weighted average number of shares outstanding for the quarter was also 74,825,166.
The Market
The tanker market has shown high volatility so far in the third quarter. Average day rates for VLCC have according to Clarkson been $108,000 so far in the third quarter compared to $30,000 in the third quarter 2007. The market has during the last weeks shown a temporary negative development.
Bunkers at Fujairah averaged approximately $578/mt in the second quarter with a low of approximately $495/mt and a high of approximately $680/mt. The average bunker price at Fujairah so far in the third quarter is $713/mt, according to Platts, while present quotes are $657/mt.
The International Energy Agency (IEA) reported in August 2008 an average OPEC oil production, including Iraq, of 32.2 million barrels per day during the second quarter of the year, a 0.2 million barrels per day decrease from the first quarter. The next OPEC meeting is scheduled to take place on September 9, 2008.
IEA further estimates that world oil demand averaged 86.1 million barrels per day in the second quarter, a 0.8 percent decrease from the first quarter of 2008. IEA predicts that the average demand for 2008 in total will be 86.9 million barrels per day, or a 0.9 percent growth from 2007, hence showing a continued demand growth.
According to Fearnleys, the VLCC fleet totalled 486 vessels at the end of the second quarter with five deliveries during the quarter. There are 24 additional deliveries expected in 2008. The total order book amounted to 208 vessels at the end of the second quarter, up from 185 vessels after the first quarter of 2008. The current orderbook represents about 43 percent of the VLCC fleet. Seven VLCCs were deleted from the trading fleet whilst 28 VLCCs were ordered during the quarter. The single hull fleet amounted to 117 vessels at the end of the second quarter.
Strategy
The Company's strategy will mainly be concentrated around long term charters to reputable companies and for the time being BP Shipping Limited, Chevron Transport Corporation and Frontline.
The Board feels that the stock price is not reflecting the value of the underlying assets in the Company, and is working on different alternatives including strategic options in order reduce this differential.
Outlook
The quarterly earnings for the remainder of the year are expected to be in line with the second quarter of 2008. From January 2009 the Board anticipates stronger results as a consequence of the VLCC British Pioneer coming off a fixed charter rate and starting to trade at a market rate with a minimum rate of $20,000 per day. On the basis of the Imarex TD3 forward rate (CAL 09) as per August 26, 2008 including an increase in forward flat rate of 38.1%, the estimated charter rate is approximately $68,000 per day, compared to present charter today of approximately $33,000 (including opex) per day. The difference on a yearly basis of $12.8 million is equivalent to incremental earnings per share of approximately $0.17. In addition, three further VLCC vessels will start trading at a market rate during 2010.
The Company is well financed and anticipates strong increase in cash flow in the years to come.
Forward Looking Statements
This press release contains forward looking statements. These statements are based upon various assumptions, many of which are based, in turn, upon further assumptions, including the Company's management's examination of historical operating trends. Although the Company believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control, the Company cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions.
Important factors that, in the Company's view, could cause actual results to differ materially from those discussed in this press release include the strength of world economies and currencies, general market conditions including fluctuations in charter hire rates and vessel values, changes in demand in the tanker market as a result of changes in OPEC's petroleum production levels and world wide oil consumption and storage, changes in the Company's operating expenses including bunker prices, drydocking and insurance costs, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, and other important factors described from time to time in the reports filed by the Company with the Norwegian over-the-counter market in Oslo.
The full report is available in the link below and on the Company's website: http://www.itcl.bm
August 26, 2008
The Board of Directors
Independent Tankers Corporation Limited
Hamilton, Bermuda
Questions should be directed to:
Bengt Neteland: Vice President Finance, Frontline Management AS
+47 23 11 40 37 or +47 924 99 386
Published: 08:46 27.08.2008 GMT+2 /HUGIN /Source: Independent Tankers Corporation Limited /OSE: ITCL /ISIN: BMG4758V1000
Thanks jwalk for the holdings list. This is a nice ETF, which follows the shipping companies' stock prices on the market.
BDI measures the shipping dayrates, so these two complete each others.
UPDATE 1-Omega Navigation Q2 results top Street estimates
Mon Aug 25, 2008 6:12pm EDT
Aug 25 (Reuters) - Greek oil tanker company Omega Navigation Enterprises Inc (ONAV.O: Quote, Profile, Research, Stock Buzz) (ONEN.SI: Quote, Profile, Research, Stock Buzz) reported second-quarter results that topped analysts' expectations, helped by higher charter rates and number of operating days of its Panamax tankers.
For the quarter, the company's net income more than doubled to $8 million, or 53 cents per basic share. Excluding a non-cash gain and a non-cash loss, Omega Navigation reported a net income of $5.7 million, or 38 cents per basic share.
Revenue rose 7 percent to $19.3 million.
Analysts on average were expecting earnings, before special items, of 31 cents a share, on revenue of $18.4 million, according to Reuters Estimates.
Operating days of the Panamax tankers rose nearly 5 percent to 546, while the time charter equivalent rate grew by $33 to $25,050 per day. Interest expense and finance costs fell more than 33 percent to $3.2 million.
Shares of the Piraeus, Greece-based company closed at $14.29 Monday on Nasdaq. (Reporting by Shradhha Sharma in Bangalore; Editing by Anil D'Silva)
DOCKF.PK New contracts for Dockwise in military segment
Hamilton Bermuda, 20 August, 2008 - Dockwise Ltd. announces that its subsidiary Dockwise Shipping has entered into contracts with the Spanish naval shipyard Navantia for the transport of two Canberra-class amphibious helicopter carriers (LHD) and with the Russian naval shipyard Zvezda for the transport of two nuclear powered submarines.
Navantia, located in Ferrol, Spain, a naval shipyard, is building the two LHD's for the Australian Navy. The hull of the vessels and its outfitting will, to a large extend be completed by the Spanish yard. The final construction, outfitting and commissioning will be performed by Australian contractors. In this arrangement the transport to Melbourne on the deck of a semi submersible transport vessel is the preferred option. To accommodate the 231 meter long LHD's, Dockwise and Navantia have agreed the use of the Blue Marlin for each of the two transports. Execution of the contracts will take place in 2012 and 2014.
Naval shipyard Zvezda, located in Bolshoi Kamen, Russia, will dismantle the two nuclear powered submarines. This project is sponsored by the Canadian Government under the Global Partnership Programme, originally established by the G8 to stop the proliferation of weapons and materials of mass destruction. The submarines, located in Kamchatka, form part of a larger number of nuclear powered submarines to be dismantled by Zvezda. Dockwise will involve nuclear experts in this project in which safety and security have absolute priority. Execution of the contract will take place in 2009.
The combined value of the contracts is almost 40 million USD. Dockwise's Chief Executive Officer André Goedée is pleased with the contracts:
"Throughout the years Dockwise has been engaged in projects for different international navies, with a large variety of naval equipment involved. Mobilizing or demobilizing military naval equipment on its own power is, for different reasons, not always possible . The capacity of the Dockwise vessels often allows for creative and unorthodox solutions, apart from other arguments such as safety, security, reduction of wear and tear and predetermined arrival targets. The contribution of these contracts once again indicates the importance of the market diversity on which the Dockwise strategy is built."
Published: 09:00 25.08.2008 GMT+2 /HUGIN /Source: Dockwise Ltd /OSE: DOCK /ISIN: BMG2786A1062
Ship Finance International: Cruising on Profits
by: Tim Plaehn posted on: August 24, 2008 | about stocks: FRO / SFL
I should not be bored owning a high yield stock that is this consistent, but the quarterly earnings reports for Ship Finance International Ltd (SFL) almost makes it difficult to write an interesting analysis. (Call Transcript)
Ship Finance has developed a business model that appears to be bullet proof and the market puts such a low value on the company there appears to be no room for a negative surprise. This quarter SFL increased the quarterly dividend 2¢ to 58¢, giving the stock a current yield of about 8.4%. This makes 18 straight quarters where the dividend has been stable or increased.
Here is a little background and some numbers that I think show the stability of Ship Finance. The company was spun off by Frontline Ltd. (FRO) in 2004 with 40-some of Frontline’s tankers, which have been leased back to FRO. 39 of SFL’s vessels are still leased to FRO and in the last 4 years SFL has increased its fleet to a total of 71. Oil tankers now make up approximately half of the fleet as the company has diversified into dry bulk, container ships, offshore supply ships, drill rigs and chemical tankers. Most of the leases require the lessees to pay ongoing expenses and SFL books steady profitable cash flow from each lease. The fleet has an average remaining charter term of 13.4 years.
I love the cash flow: From the fixed charter payments the cash flow (EBITA minus interest) per quarter is $1.11 per share, excellent coverage for the 58¢ dividend. In addition to the regular lease payments SFL has a profit sharing agreement with Frontline to receive 20% of the revenue over a fixed charter rate. This amount came at 46¢ a share for the excellent 2nd quarter. The profit share has averaged over 30¢ per share for the last 18 quarters. Ship Finance will also take advantage of profitable sales opportunities. The company recently sold two new-build tankers to be completed next year for $111 million each providing a profit of $68 million (about 50¢ per share) to be booked next year.
The company is using the excess cash flow to pay down debt and as capital to invest in fleet expansion. All deals are viewed with the goal to increase the quarterly distribution. They have ready access to financing and structure new deals to minimize capital and interest rate risk.
I look forward to future dividend increases and would not mind if the market started pricing the stock like the stable dividend payer it is, a 6.5% yield would give a $35 share price. I think the stock is definitely a buy anytime the yield pushes into the mid 8s. SFL is a component of this site’s Income Portfolio.
Note: I have a long position in SFL.
ALERT! FRO asks shareholders to accept a rise of A/S to 625 mill. shares, a 5 to 1 forward split! A/S now 125 mill. and O/S 74.8 mill. shares. What's up?
I, however, think this is a long term project and Fredriksen just wants to have the possibility at hands if and when needed. Hopefully some clarification will come out at the next Thursday conference call.
"PROPOSAL 7 from the FRO Proxy statement: – SUB-DIVISION OF SHARE CAPITAL
The Company’s authorised share capital is currently 125,000,000 Ordinary Shares of par value $2.50 each. At July 31, 2008 the Company’s issued share capital was 74,825,169 Ordinary Shares of $2.50 each and at that date the closing share price of the Ordinary Shares on the New York Stock Exchange was $64.17. The Board of Directors proposes that the shareholders approve to sub-divide the Company’s authorized share capital of 125,000,000 Ordinary Shares of par value $2.50 each into an authorized share capital of 625,000,000 Ordinary Shares of par value $0.50 each (the “Stock Split”). No change in total stockholders' equity will result from the Stock Split.
The Board of Directors does not intend at this time to set a record date for the effectiveness of the Stock Split but instead wishes to use the authority given by the shareholders to set a record date at such future date as the Board deems appropriate. If the Stock Split is approved, on such future record date each holder of Ordinary Shares will be entitled to receive five (5) Ordinary Shares of par value $0.50 each in exchange for each one (1) Ordinary Shares of par value $2.50 each held.
The Board of Directors believes that in the appropriate market circumstances, the Stock Split would be in the Company's best interests in order to lower the per share market price of the Ordinary Shares, increase trading activity and broaden the marketability of the Ordinary Shares"
Hello Milner. I can't remember now about what happened to those two ships, but GDOCF will release its 2Q information and CC on August 20th, and at least then will this thing be cleared.
DOCKF.PK NOK16.00 = USD 2.98 New Dockwise contract for transportation of 18 onshore modules for Koniambo Nickel Project in New Caledonia
Bermuda, 12 August, 2008 - Dockwise Ltd. announces that a contract has been awarded to their subsidiary Dockwise Shipping for the transportation from China to New Caledonia of 18 onshore modules including an extended engineering and associated services scope. The contract was awarded by Hatch-Technip on behalf of Koniambo Nickel SAS, a joint venture owned by Xstrata Nickel and Société Minière du Sud Pacifique ("SMSP"). Hatch-Technip, based in Kuala Lumpur, Malaysia, has been appointed as main contractor.
The transportation of the modules is scheduled for late 2009, early 2010 and will be performed as multiple consecutive voyages by the new Dockwise T-class vessels.
The modules fabricated in China, will be loaded at the yard of CNOOC's construction company COOEC at Qingdao, China. The modules will be offloaded in Vavouto, New Caledonia. The contract is one of the company's first large extended scope onshore industrial contracts. Presence in this market segment is one of the prime strategic objectives of Dockwise.
The value of the contract to Dockwise is approximately 22 million USD. Koniambo is one of the world's largest and highest-grade undeveloped nickel and laterite deposits. The planned smelter will have an annual production capacity of 60,000 tonnes of ferrous nickel alloy.
"Onshore industrial projects, such as LNG terminals, refineries and plants like the one involved in this contract are more often constructed in remote areas," Dockwise CEO André Goedée says. "To limit onsite construction, modular construction is the solution. While modules are fabricated at yards in China or Korea, the massive
content of some of those projects adds substantial additional logistic challenges. It is here where the capabilities of the Dockwise organization combined with the flexibility of its large versatile fleet provide clients with cost effective solutions." The strategy of Dockwise is focused on a continued increase in modular construction worldwide and aims at early involvement in these types of onshore industrial projects.
-End-
For further information
Fons van Lith
+1441 5991818
Fons.van.lith@dockwise.com
Published: 15:19 12.08.2008 GMT+2 /HUGIN /Source: Dockwise Ltd /OSE: DOCK /ISIN: BMG2786A1062
As the shippers sink, should you jump onboard?
Monday, 11 August 2008
Investing in the shipping sector has not been for the faint of heart recently. As commodities have lost their luster, so have the industries that are lumped in with them, such as the shippers, the fertilizers, and large industrial mining equipment manufacturers. These 4 shippers are all Zacks #1 Rank (Strong Buy) stocks: Tsakos Energy & Navigation (TNP), Genco Shipping (GNK), TBS International (TBSI), and Paragon Shipping (PRGN). Yet investors have shown their love by selling off all four stocks Tsakos Energy, a crude shipper, is down 17% from its 52-week high. Genco, which ships drybulk cargo, has fallen 35%. Paragon, another drybulk shipper, lost 49%.
It's more of the same for TBS International, a drybulk shipper that specializes in smaller ships that can service hard to reach ports, as its shares have dropped 58% over the last 52 weeks.
Are These Stocks Like the Titanic?
Coming on the heels of these sharp sell-offs, are the shipping stocks a juicy value play or a value trap? Commodities are suddenly in disfavor and Wall Street fears a greater global slowdown that will likely impact shipping rates and volumes.
Fortunately, all four of these companies recently gave insight into the shipping sector when they reported quarterly earnings. Each one had a great quarter and was bullish about the rest of 2008 as the time charter rates and spot rates continue to rise compared with 2007.
Tsakos Energy Reports a Record Quarter
Tsakos Energy reported second quarter earnings on Aug 1 that easily beat Wall Street estimates by 32%. Net income jumped 84.5% to $69.20 million, or $1.82 per share, from $37.52 million, or 98 cents per share, in the second quarter of 2007. Analysts expected $1.38 per share.
Revenues jumped 36.8% to $146.64 million from $107.22 million in the year ago period as time charter equivalent rates rose to $39,512 per day per ship compared to $30,021 in the second quarter of 2007.
The company said that the spot and period freight rate environment continued to be very strong, as tanker rates averaged levels not seen since the 1970s. However, Tsakos expects global growth to decelerate in the second half of 2008.
Genco Secures 94% of 2008 Fleet
On July 30, Genco reported second quarter earnings that beat Wall Street estimates by 13.37%, or 23 cents per share. Net income was $58.3 million, or $1.95 per share compared to analysts' estimates of $1.72 per share.
Genco is set for 2008 as it has approximately 94% of the fleet's available days secured on contracts. Additionally, it has 60% secured in 2009. GNK said it continues to renew vessels at attractive rates and to sign newly acquired vessels to charters prior to delivery.
Like the other shippers, GNK saw its average daily time charter equivalent, or TCE, rates soar by 95% in the quarter to $40,945 per day compared to $21,046 per day for the second quarter of 2007.
TBS International Reports Its Second Record Quarter in a Row
TBS International didn't just have a great quarter, it had the best quarter in the company's history. Net income rose 142.4% to $52.6 million, or $1.82 per share, compared to $21.7 million, or 77 cents per share in the second quarter of 2007. Consensus estimates called for $1.63 per share.
Revenues jumped 104.6% to $156.9 million from $76.7 million in the year ago period. Voyage revenues totaled $128.7 million, up 113.1% from $60.4 million in 2007.
Cargo volume increased 52.7% and freight rates rose 37.6%, or $25.06 to $91.79 per ton compared to $66.73 per ton in the 2007 period.
Paragon Shipping Raises its Dividend on a Record Quarter
On Aug 6, PRGN reported a record second quarter as net income for the quarter, excluding non-cash items, was 49 cents per share compared to 45 cents per share in the second quarter of 2007. This was an estimate surprise of 19.51%.
Time charter revenue jumped 196% to $40.6 million from $13.7 million in the second quarter of 2007.
The company is bullish about 2008 as it has already fixed 100% of its fleet for the year. PRGN announced it raised its dividend 14.3% for the second quarter compared to the first as growth looks strong and time charter rates continue to be high.
Do These Companies Sound Down and Out to You?
Obviously, prior quarters are not indicative of future results. But the first six months of the year have been extremely bullish for the shipping sector. Full year estimates are rising on each of these companies and valuations are attractive.
All four trade at under 10x forward earnings. TBS International has a forward P/E of only 4.16.
TNP, GNK and PRGN also pay healthy dividends. Currently, Tsakos is yielding 5.30%, Genco 6.90% and Paragon 11.40%.
Source: Zacks
TUI to sue?
John Fredriksen may face court action if he blocks Hapag-Lloyd sale, reports claim.
John Fredriksen may find himself in court as his feud with TUI over the sale of Hapag-Lloyd deepens.
The German group will sue the Norwegian magnate if he tries to block the sale of its containership unit with a preliminary injunction, reports in Germany say.
........
, 08:34 GMT, 11 August 2008
DOCKF.PK $3.00 New contracts for Dockwise
Bermuda, August 8, 2008. Dockwise Ltd. announces that two new contracts have been awarded to their subsidiary Dockwise Shipping for the transportation of one of the largest semi submersible drilling rigs and various floating equipment.
Dockwise Shipping will transport the new build 6th generation semi submersible drilling rig Noble Dave Beard in 2009 as well as various floating docks and other equipment in 2008.
The total value of the contracts is approximately USD 18 million.
All contracts will contribute to the aim of Dockwise Shipping to continuously employ its vessels at the highest possible utilization.
- End -
Published: 09:00 08.08.2008 GMT+2 /HUGIN /Source: Dockwise Ltd /OSE: DOCK /ISIN: BMG2786A1062
For further information, please contact:
Fons van Lith
+1441 5991818
Fons.van.lith@dockwise.com
Ship-Plate Prices Will Rise This Year, Rongsheng Says
Thursday, 07 August 2008
Prices of ship-plate steel in China, the world's biggest maker of bulk carriers, will increase to a record this year on demand for fleets to carry iron ore and oil, according to two of the nation's shipyards. Prices may rise by a ``few hundred yuan'' a metric ton after doubling to more than 8,000 yuan ($1,168) in the past four years, Jiangsu Rongsheng Heavy Industry Group Co. Chairman Chen Qiang said in a phone interview. Rongsheng, partly owned by Goldman Sachs Group Inc., won a $1.6 billion order this week.
Steel accounts for at least 30 percent of costs at Rugao, Jiangsu province-based Rongsheng, which buys the plates from Baoshan Iron & Steel Co., Jiangsu Shagang Group Co., and Shougang Corp. In South Korea, the world's largest shipbuilding nation, the price of steel used for ship hulls jumped 74 percent this year.
``For steelmakers, ship plates are one of the most profitable sectors,'' said Luo Wei, a Shanghai-based analyst with China International Capital Corp. Plates account for a quarter of the profit at Baoshan, China's largest mill, he said.
Cosco Corp. Singapore Ltd., the shipbuilding and repair unit of China's biggest marine line, also expects higher prices.
``Ship-plate prices may rise a little because of higher raw-material and labor costs in China,'' Cosco Corp. President Ji Haisheng said yesterday in a phone interview.
Steelmakers Profit
Cosco buys steel from Baosteel Group Corp., the parent of Baoshan Iron, and Anshan Iron & Steel Group. The Singapore-based company is paying about 6,200 yuan a ton for steel, an increase of 28 percent this year, according to JPMorgan Chase & Co.
Higher ship-plates prices may help Baoshan Steel and competitors sustain profit growth as prices for other products may decline. China's supply of steel used in cars and appliances may rise in the second half, depressing prices, the China Iron and Steel Association said July 30.
Rongsheng Heavy Industry needs 2.4 million metric tons of ship plates by 2010, said Chen, who is also president. The company has orders for more than 100 ships, including iron ore carriers, tankers, drilling and container ships, he said.
The company will build 12 vessels for Cia. Vale do Rio Doce, the world's largest supplier of iron ore, for delivery from early 2011.
``There is still tightness in the market as China's ship production will rise this and next year,'' said Rongsheng's Chen late yesterday. The shipbuilder has been able to pass on higher steel costs for new contracts, he said.
Chinese Demand
Shipbuilders in China this year will probably only buy domestic steel, trimming imports, because of increasing capacity, Chen said.
``Chinese steelmakers are able to supply all types of the steel we need from this year as their production catches up,'' he said. ``As we see more steel capacity in the pipeline, prices may fall from next year.''
South Korea exported 147,000 tons of steel plates to China in the first six months of the year, according to the Korea Iron & Steel Association.
Global ship production may peak next year and start to fall from 2010 as buyers struggle to get credit because of the subprime crisis, Chen said.
Daewoo Shipbuilding & Marine Engineering Co. and Hyundai Mipo Dockyard Co. last week said customers canceled orders.
`Unexpected Rise'
Tokyo-based Mitsui Engineering & Shipbuilding Co., Japan's second-largest shipbuilder, said today it may miss its full-year profit forecast because the cost of steel is 30 percent higher than expected.
``A big rise in steel prices is the biggest problem in securing profit,'' President Yasuhiko Katoh, 61, said in an interview in Tokyo.
Dongkuk Steel Mill Co., South Korea's second-largest provider of the material, is charging a record 1.26 million won ($1,239) a metric ton.
``Shipbuilders are able to pass some of the rising costs on to their customers, but not all,'' said Jack Xu, a Shanghai- based analyst at Sinopac Securities Co. in Shanghai.
Source: Bloomberg
Hello Milner. This is a typical pull-back in shipping cycles, and of course China's Olympic games has its influence on it. They have closed many coal energy plants around Beijing, and two big ports for two months now.
In a little longer run, I do not think that world trade is much slowing down. The emerging nations (BRIC) just have started their growth to industrialized and developed countries, and goods and commodities will be hauled "from the haves to the not-haves".
Deliveries of new vessels have slowed down, and many orders have been cancelled due to the difficult financing situation. It is dofficult to get a loan in the present financial crisis.
Keep an eye on S&P 500 chart ($spx http://stockcharts.com/h-sc/ui) and the 200 days Moving Average on it. When the index rises above that MA, and stays there for 10 days, it shows that bull market has began.
I would use these pull-backs to buy more my favourite shipping stocks: FRO, GDOCF, SFL, VLCCF
Meaning: good dividends
SFL $29.66 Sale of two newbuilding Suezmax vessels at record high prices
Thursday July 31, 8:17 am ET
HAMILTON, BERMUDA--(MARKET WIRE)--Jul 31, 2008 --
Ship Finance International Limited (SFL - News) ("Ship Finance" or the "Company"), today announced that it has entered into an agreement to sell two newbuilding Suezmax crude oil tankers, currently under construction in China. Scheduled delivery from the shipyard is in 2009, and delivery to the new owner will take place immediately after delivery from the shipyard.
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The gross sales price per vessel has been agreed to $111 million, and net of construction costs and broker commissions we expect to recognize a book profit of approximately $68 million ($0.94 per share), or approximately $34 million per vessel upon delivery to the new owner.
Lars Solbakken, Chief Executive Officer in Ship Finance Management AS, said in a comment: "We are pleased to announce this very profitable sale of two newbuildings which we ordered without long term employment two years ago. The sale is consistent with our strategy to maximize returns for our shareholders, and we will book a profit of approximately $68 million on a very moderate equity investment in this project. We see significant growth opportunities across our target segments, and the net proceeds from this sale will be redeployed as equity in new accretive projects that we expect will increase our long-term dividend capacity."
SDRLF.PK $27.72 SDRL - Ultra-deepwater semi West Sirius commences operations for Devon Energy
Yesterday, the ultra-deepwater semi-submersible rig West Sirius commenced operations for Devon Energy in the Gulf of Mexico. West Sirius, which was delivered from Jurong Shipyard in Singapore on March 31 this year, arrived in the Gulf of Mexico earlier this month and has since arrival been finalizing commissioning and acceptance work for the operator. West Sirius has a six-year contract with Devon Energy for operations in the Gulf of Mexico. Start-up of operations is in line with the original start-up schedule on the contract. For the mobilization period, Seadrill will receive a dayrate element and compensation for fuel costs, which will be taken to income over the six-year contract term.
Alf C Thorkildsen, Chief Executive Officer in Seadrill Management AS, says in a comment, "After several months in transit from Singapore, we are excited to have started our first deepwater operations in the Gulf of Mexico. This is an important milestone for our Company as West Sirius is the first out of eight deepwater units to be delivered this year, to commence operations. This is also our first assignment for Devon Energy and we look forward to a close co-operation with them over the coming six years."
Published: 08:44 25.07.2008 GMT+2 /HUGIN /Source: Seadrill Limited /OSE: SDRL /ISIN: BMG7945E1057
SFL $29.26 Ship Finance Int'l: Steady Income in a Volatile Sector
by: Tim Plaehn posted on: July 20, 2008 | about stocks: FRO / NAT / SFL
What would you think of a stock that had the following characteristics:
* Current yield: 7.7%
* No dividend quirks: Not a LP, MLP or foreign stock with withholding rules.
* Steady dividend growth: 2004: $1.55 per share, 2005: $2.00 per share, 2006: $2.09 per share, 2007: $2.20 per share and a minimum of $2.27 for 2008.
* The quarterly dividend has never been reduced (and usually increased) since the company’s spinoff in 2004.
* The company is well capitalized and has sufficient cash flow to maintain the dividend and continue to grow the business.
* Finding news about the company outside of its website is almost impossible.
The company I am discussing is Ship Finance International Ltd. (SFL). Ship Finance was spun off by Frontline (FRO) starting in 2004 as a leasing company with 47 of what had been Frontline’s tankers. The fleet now consists of 59 vessels (33 tankers) of various types with another 14 on order. The fleet currently has an asset value of approximately $7 billion vs. a little over $2 billion in long term debt.
SFL’s business model has the company lease its vessels on long term (10-20 years) bareboat leases. It gets paid first on the money the ships' lesees earn plus have profit sharing above a certain income level on many of the ships, notably those leased to Frontline. The dividend payout is between 30% and 40% of free cash flow, leaving plenty of cash left to continue growing its fleet.
Ship Finance stock is a buy anytime the share price is pushed down enough to drive the yield over 8%. Combine SFL with my other Income Portfolio tanker company, Nordic American Tankers (NAT) to get a pair of well run shipping companies that allow you to profit from the tremendous swings of this sector. Reinvest your dividends into which ever of the pair is the best value at the time.
Note: I have long positions in SFL and NAT.
GLNG $16.83 GOLAR LNG AND BLUEWATER OFFSHORE ANNOUNCE OFFSHORE FSRU PROJECT BID COOPERATION AND VESSEL PURCHASE
Tuesday July 15, 4:31 am ET
LONDON--(MARKET WIRE)--Jul 15, 2008 --
Golar LNG ("Golar") is pleased to announce that it has agreed to partner with Bluewater Energy Services B.V ("Bluewater") for the purposes of bidding for an offshore LNG FSRU opportunity with South Africa's national oil company, PetroSA. Golar and Bluewater will be equal partners in a joint venture formed specifically for this opportunity. Additionally, and in conjunction with this bid, Golar and Bluewater have agreed to acquire the 1977 built Moss type 126,000 m3 LNG Carrier, Hoegh Gandria. The vessel is intended to be used as the converted offshore FSRU.
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The Bluewater group of companies has built a technological lead specializing in lease and operation of tanker-based Production and Storage (FPSO/FSO) systems, and has become a leading provider of advanced Single Point Mooring (SPM) systems. Bluewater operates worldwide with offices in The Netherlands, United Kingdom, United States, South Africa, Nigeria, Angola, Malaysia, Russia and China. Bluewater are providing their propriety LNG tandem loading system which forms an important part of the offer to PetroSA.
Golar LNG is a leading independent owner and operator of LNG ships, providing both traditional LNG transportation services and more recently LNG mid-stream solutions including LNG floating storage and regasification units (FSRU). Golar Management UK Ltd CEO, Gary Smith commented that "the acquisition of the Gandria in partnership with Bluewater and joint bidding for the technically challenging opportunity in South Africa demonstrates Golar's firm commitment to continue growing its mid stream business, its ability to partner with leading industry participants in order to deliver the best available technical solutions and its commitment to enhance shareholder value by being a first mover in this expanding area of business."
Golar LNG Limited
Hamilton, Bermuda.
July 14, 2008.
Questions:
Gary Smith
Graham Robjohns
Golar Management (UK) Ltd
+44 (0) 207 517 8600
SDRLF.PK $29.75 SDRL - Seadrill takes delivery of the ultra-deepwater drillship West Polaris
Seadrill is pleased to report the delivery of the ultra-deepwater drillship West Polaris from Samsung Heavy Industries. The drillship will leave Korean waters tomorrow after completing fuelling and some general mobilisation activities en route to its first drilling assignment for Exxon in Brazil. West Polaris was delivered 10 days after original contract schedule with a final project cost as previously reported. West Polaris has a four-year contract for worldwide exploration activities for Exxon. Exxon will pay Seadrill a pre-agreed dayrate for the transit period in addition to fuel.
The ultra-deepwater semi-submersible rig West Phoenix was originally delivered from Samsung Heavy Industries in Korea on March 31 this year. The unit has a three-year contract with Total Norge for operations in the North Atlantic region. The unit is currently in the port of Las Palmas, Spain en route to Norway. In Las Palmas, the unit's main drilling equipment systems are undergoing testing and commissioning activities. These activities are taking longer than previously anticipated. As a consequence, the revised start-up of operations for Total on the Victoria field has been postponed from late August to October this year.
Alf C Thorkildsen, Chief Executive Officer in Seadrill Management AS, says in a comment, "We are pleased to report the delivery of West Polaris, the first of three ultra-deepwater drillships that we have ordered from Samsung Heavy Industries in Korea. The construction of West Polaris was successfully completed on time and at budget and we are now looking forward to taking the new drillship into what will be our first deepwater drilling operations offshore Brazil. In respect of West Phoenix, which will be one of the most advanced offshore drilling units in the industry we see that the commissioning of the drilling package is taking longer than originally anticipated. We are not pleased with the development, but are working closely with our suppliers in order to ensure effective delivery within the revised timeline."
Published: 08:31 15.07.2008 GMT+2 /HUGIN /Source: Seadrill Limited /OSE: SDRL /ISIN: BMG7945E1057
Analyst contact:
Jim Dåtland, Vice President Investor Relations, Seadrill Management AS
+47 51 30 99 19
Media contact:
Trond Brandsrud, Chief Financial Officer, Seadrill Management AS
+47 51 30 99 19
Seadrill Limited
Hamilton, Bermuda
July 15, 2008