Ocean Yield (Buy, TP: NOK28.00) - Set for increased dividends
We have raised our net profit estimates for 2020–2022 by an average of USD10m, mainly due to lower interest costs. We expect focus to be on new transactions and increasing dividends; our new 2021e DPS is USD0.23 (USD0.20). Uncertainty about the contract situation for the legacy offshore vessels is likely to persist, but we see both cash and equity building in the next few quarters, which should contribute to headroom in the event of further impairments. We have raised our target price to NOK28 (26), assuming an 8% yield on our 2021e DPS, and reiterate our BUY.Ocean Yield provides investments in vessels within oil-service and industrial shipping industry. Co. is a ship-owning company with investments in vessels on long-term charters.
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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