BMTI Shipping Investment Review (11 May 2021)

shipping financeOslo-listed dry bulk operator 2020 Bulkers recently released their first quarter numbers, showing that the company has performed notably better than a year before with total revenue of US$ 17m for Q1-2021 (compared to US$ 7.8m in Q1-2020). Operating profit over the same quarter amounted to US$ 8.2m (versus US$ 2.5m a year before) while net profit was US$ 5.8m. The Bermuda-registered company currently operates a fleet of eight Newcastlemax bulk carriers. Average TCE earnings in Q1 of this year were US$ 23,900 daily, says 2020 Bulkers, while the average for Q2 so far has climbed to US$ 33,700 daily. This week, owners Tor Olav Trøim and Ubon Partners sold over 14% of company shares on the Oslo Stock Exchange for US$ 36m, leaving Trøim with just under 25% of company ownership.

Mining corporation Rio Tinto this week announced plans to charter three newbuilding LNG duel-fuelled Newcastlemax bulkers with an option to charter an additional three such vessels. At 210,000 dwt each and set for delivery beginning in the second half of 2023, the ships will be owned by Singapore-based Eastern Pacific Shipping (EPS) and built at New Times Shipbuilding. Rio Tinto says that it is incorporating LNG duel-fuel shipping into its fleet to help reduce its carbon footprint and provide new opportunities to meet its emissions reduction goals.

Secondhand bulk carrier prices have climbed more than 30% in the past six months, so it seems to be a good time to acquire bulker tonnage while the market is still relatively undervalued. This is the strategy of Greek shipowner Castor Maritime (listed on Nasdaq under CTRM), which has been rapidly expanding its fleet with secondhand bulker and tanker tonnage this year, having already increased its fleet by more than 300% in the year to date. Most recently, Castor purchased the Japanese-built Panamax “Nord Sirius” this week for US$ 19.8m, making it the ninth Panamax in the company’s fleet. The Castor fleet comprises 15 bulkers and three tankers.

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