DnB Markets - American Shipping Company ASA (AMSC) AMSC ASA (Buy, TP: NOK59.00) - More dividends on the horizon

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DnB Markets

Jørgen Lian

EUR 88.86 For Business Accounts Only

AMSC ASA (Buy, TP: NOK59.00) - More dividends on the horizon

We forecast an increase in dividends from Q1, boosting the implied run-rate dividend yield from 11% to 14%, and further to 16% for 2024e. We are focused on whether AMSC can provide colour on future dividend increases, as the Normand Maximus is set to generate sizeable returns from an estimated cUSD30m annual EBITDA contribution from Q4e. AMSC’s legacy Jones Act tankers have also been contracted until at least 2026, which should provide firm cash flows to support dividend payments. We reiterate our BUY but have cut our target price to NOK59 (65).

15/02/2023 1 EN

Underlying

American Shipping Company ASA

American Shipping Company is a U.S. ship owning and lease finance company with focus on building a premier ownership position. Through its subsidiaries, Co. is engaged in the purchase and bareboat chartering of product tankers, shuttle tankers, and other vessels to operators and end users in the Jones Act market. Co. owns ten modern 46,000 dwt MR product tankers that were built by Aker Philadelphia Shipyard. All ten vessels are on long term fixed rate bareboat charters with Overseas Shipholding Group Inc. Co. also holds an equity stake in Philly Tankers AS/LLC, founded in 2014 to build two new product tankers at Aker Philadelphia Shipyard.

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NO0010272065 Oslo Bors Norway

Provider

DnB Markets

DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.

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Analysts

Jørgen Lian

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AMSC ASA (Buy, TP: NOK59.00) - More dividends on the horizon

Yard response and dry bulk qualms

A brewing challenge for the yards

AMSC ASA (Hold, TP: NOK23.30) - Set to be a derivative of Solstad

Skistar (Buy, TP: SEK180.00) - Solid outlook for 2024/25e

TGS (Hold, TP: NOK125.00) - Q3 set for soft utilisation

Norsk Hydro (Sell, TP: NOK50.00) - Aluminium is not a scarce resource

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