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Shipping stocks kept losing track during final month of the year

Monday, 16 January 2012 | 00:00
Shipping related stocks took a battering this year and December proved not an exception to the general rule. Publicly-traded shipping companies of nearly all segments of the market saw their stock values plummeting, but investors are now much more aware of the different fundamentals governing each company. Various strategies and chartering policies have enabled some companies to effectively deal with the low shipping rates observed this year in the dry bulk, tanker and container markets, giving them the edge in some cases. Of course, some other companies, burdened by high leverage costs haven't been able to make ends meet and have found themselves in the red, recording losses every quarter. But, as often is said, shipping isn't all about "right here right now". It's a long-term business, which more often than ever rewards those who are patient and are well positioned to take advantage of the next market boom.
DANAOS CORPORATION
On December 15, 2011, it took delivery of one more newly built containership, the CMA CGM SAMSON, expanding its operational fleet to a total of 59 containerships aggregating 291,149 TEU.
The CMA CGM SAMSON, built at Shanghai Jiangnan Changxing Heavy Industry has a carrying capacity of 8,530 TEU, is 335 meters long, 42.8 meters wide and has a speed of 25.80 knots. The CMA CGM SAMSON has commenced its 12-year time charter at a fixed charter rate immediately upon delivery.
DIANA CONTAINERSHIPS INC
On December 19, 2011 Diana Containerships Inc. announced that it has signed two Memoranda of Agreement with Reederei Santa Containerschiffe GmbH & Co. KG (“the Sellers”) for the purchase of two Panamax container vessels, m/v “Cap San Marco” and m/v “Cap San Raphael”.
The m/v “Cap San Marco” is a 2001-built vessel of approximately 3,750 TEU capacity and the m/v “Cap San Raphael” is a 2002-built vessel of approximately 3,750 TEU capacity. The purchase price for each vessel is US$33 million. The expected dates of delivery from their previous owners to the Company for both vessels are between January 5, 2012 and February 29, 2012.
Each of the two vessels is chartered back to the sellers of the vessels for a period of thirty-six (36) months plus or minus forty-five (45) days. The net daily charter hire rate for each vessel will be US$22,750 during the first twelve (12) months, US$22,850 during the second twelve (12) months and US$23,250 during the third twelve (12) months of the charter. Each charter will commence on or about the day of that vessel’s delivery to the Company.
Separately, the Company also announced today that it has entered into an agreement for a revolving credit facility of up to US$100 million with The Royal Bank of Scotland plc, which may be increased to US$150 million subject to further syndication. The credit facility has a term of five years and will bear interest at the rate of 2.75% over LIBOR. The Company will also pay a commitment fee of 0.99% per annum on the undrawn amount of the facility.
EAGLE BULK SHIPPING
The company has taken delivery of the Sandpiper, a 58,000 dwt newbuilding Supramax. This delivery marks the successful completion of the Company's 27-vessel Supramax newbuilding program. Eagle Bulk's fleet now totals 45 vessels with an average age of 4.4 years.
Results for Third quarter ended September 30, 2011
• Net reported loss of $5.9 million or $0.09 per share (based on a weighted average of 62,652,724 diluted shares outstanding for the quarter), compared to net income of $8.2 million, or $0.13 per share, for the comparable quarter in 2010.
• Net revenues of $80.3 million, an increase of 10% compared to $72.8 million for the comparable quarter in 2010. Gross time charter and freight revenues increased 10% to $84.0 million, compared to only time charter revenues of $76.4 million for the comparable quarter in 2010.
• EBITDA, as adjusted for exceptional items under the terms of the Company's credit agreement, was $25,931,089 for the third quarter of 2011, compared with $41,129,782 for the third quarter of 2010.
• Fleet utilization rate of 99.4%.
• Took delivery of four newbuilding vessels, Owl, Petrel, Puffin, and Roadrunner.
NEWLEAD HOLDINGS LTD
NewLead announced on December 22nd that it agreed to sell four LR1 products tanker vessels. The sale of two vessels, the Newlead Fortune and the Newlead Avra, was completed. The sale of the other two vessels, the Newlead Compass and the Newlead Compassion, is expected to be completed by the end of January 2012.
The sale of these four vessels is part of NewLead's overall financial restructuring plan to reduce debt. The Bank of Scotland syndicate, composed of 10 institutions, agreed with NewLead to accept the net sale proceeds in full satisfaction of all liabilities owned to the syndicate under the governing loan agreement. Following the completion of the sale of the four vessels, NewLead's overall indebtedness will be reduced by $147.9 million.
OMEGA NAVIGATION
On December 21st, Omega Navigation announced that, in connection with its Chapter 11 proceedings in Houston, Texas, the Court has denied the motion from the Senior Lenders to dismiss or convert the Chapter 11 cases and the separate motion for relief from the automatic stay granted in Chapter 11 proceedings. This favorable decision will enable Omega to formulate a reorganization plan for emergence from Chapter 11.
The Court also entered a separate order criticizing the Senior Lenders for alleging that Omega had acted in bad faith, finding that the evidence was clear that Omega had acted in good faith with respect to each of the allegations.
Omega, while under the protection of the Court has:
• The right to continue to operate and pay all operating expenses in the ordinary course
• The right to continue to pay employees and crew in the ordinary course
• The right to continue all cash management procedures in the ordinary course
• The right to continue to maintain all insurance in the ordinary course
Omega continues to generate sufficient cash for operations and will continue to honor all of its charter obligations during the pendency of the court protection. Omega believes the Chapter 11 reorganization process will help the Company facilitate a restructuring of its balance sheet and is working towards exiting Chapter 11 as a financially stronger entity that will be positioned to enjoy future growth based on the strength of its existing modern fleet of product tanker vessels.
PARAGON SHIPPING
Third Quarter 2011 Financial Results:
• Gross time charter revenue for the third quarter of 2011 was $21.0 million, compared to $28.7 million for the third quarter of 2010.
• The Company reported net income of $0.3 million, or $0.005 per basic and diluted share for the third quarter of 2011, calculated on 58,512,677 weighted average number of basic and diluted shares outstanding for the period and reflecting the impact of the non-cash items discussed below. For the third quarter of 2010, the Company reported net income of $4.1 million, or $0.081 per basic and diluted share, calculated on 49,482,858 weighted average number of basic and diluted shares.
• EBITDA for the third quarter of 2011 was $10.3 million, compared to $15.5 million for the third quarter of 2010. EBITDA for the third quarter of 2011 was calculated by adding to net income of $0.3 million, net interest expense and depreciation that, in the aggregate, amounted to $10.0 million.
• Adjusted EBITDA, excluding all non-cash items described below, was $12.1 million for the third quarter of 2011, compared to $19.6 million for the third quarter of 2010.
Nine months ended September 30, 2011 Financial Results:
• Gross time charter revenue for the nine months ended September 30, 2011, was $75.1 million, compared to $89.6 million for the nine months ended September 30, 2010.
• The Company reported net loss of $11.1 million, or $0.186 per basic and diluted share, for the nine months ended September 30, 2011, calculated on 57,692,787 weighted average number of basic and diluted shares outstanding for the period and reflecting the impact of the non-cash items discussed below. For the nine months ended September 30, 2010, the Company reported net income of $20.6 million, or $0.402 per basic and diluted share, calculated on 49,481,979 weighted average number of basic and diluted shares.
• EBITDA was $20.9 million for the nine months ended September 30, 2011, compared to $52.6 million for the nine months ended September 30, 2010. This was calculated by adding to net loss of $11.1 million for the nine months ended September 30, 2011, net interest expense and depreciation, that in the aggregate, amounted to $32.0 million for the nine months ended September 30, 2011.
• Adjusted EBITDA, excluding all non-cash items described below, was $44.7 million for the nine months ended September 30, 2011, compared to $53.6 million for the nine months ended September 30, 2010.
SAFE BULKERS
On December 12th Safe Bulkers announced today that it has entered into a shipbuilding contract for the construction of one Japanese-built, drybulk Panamax-class vessel at an attractive price, with an expected delivery date in the first half of 2014.
Including this acquisition, the Company has contracted to acquire 10 drybulk newbuilding vessels consisting of: five Panamax-class vessels, including one with a delivery date in the first half of 2012, two with delivery dates in the second half of 2013 and two with delivery dates in the first half of 2014; three Kamsarmax-class vessels with delivery dates in the first half of 2012; one Post-Panamax-class vessel with a delivery date in the first half of 2012; and one Capesize-class vessel with a delivery date in the second half of 2012.
TOP SHIPS
On December 30th, TOP Ships announced that it has sold the M/V PEPITO, a 75,928 dwt drybulk vessel built in 2001. The sale of the M/V PEPITO will result in a book loss of approximately $25 million.


































Source: XRTC Business Consultants, as arranged on behalf of Hellenic Shipping News Worldwide
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