Klaveness Combination Carriers (Buy, TP: NOK111.00) - Focus on strong dividend yields
Following the Q2 report, we have made minor estimate changes, as positive changes to earnings estimates are offset by off-hire days. Despite the dry bulk demand uncertainty owing to China woes and easing inefficiencies, we remain optimistic on the company’s outlook, fuelled by the continued geographical mismatch for tankers. We expect ~50% of the market cap to be returned to shareholders in 2022–2024e, while CABU contract renewals could lay a strong foundation for future dividends. We reiterate our BUY, and have raised our target price to NOK111 (109).Klaveness Combination Carriers AS is a Norway-based fleet operator. The Company owns and operates combination carriers that can switch between dry and wet cargo shipments. Its fleet consists of approximately nine CABU (caustic soda/bulk carrier) vessels with the capacity to transport from approximately 72,500 deadweight tonnage (DWT) up to approximately 80,500 DWT of caustic soda solution (CSS), floating fertilizer (UAN) and molasses, as well as all form of dry bulk commodities. Furthermore, the Company has newbuilding orders for CLEANBU (clean petroleum/bulk carrier) vessels that in addition to transporting caustic soda and dry bulk products can also transport clean petroleum products. The Company's vessels operate on international trade routes, mainly in the Far East, the Middle East, Australia, Brazil and North America.
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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