Scorpio Bulkers (SALT US) 1Q19 Result Update
1Q19 result for Scorpio Bulkers is reflective of the underlying weakness in the market spurred by iron ore supply disruptions after the Vale dam disaster in late January 2019 and the recent cyclone Veronica in Australia. EBITDA declined by more than 50% to USD 7.7m in 1Q19 from USD 18.3m in 1Q18. Owing to non-cash gain of USD 15m and dividend of USD 0.5m from investment in Scorpio Tankers, 1Q19 closed with a lower loss of USD 3.5m than USD 5.8m in 1Q18. The company’s trading portfolio will have higher exposure (69%) to the Ultramax segment especially after the sale of two Kamsarmaxes. Pricing in risks such as coal import restrictions at Chinese ports, iron ore supply disruptions and swine flu outbreak in China, we have arrived at a fair value of USD 5.50 per share.Scorpio Bulkers is an international shipping company based in Monaco. Co.'s vessels transport a range of major and minor bulk commodities, including ores, coal, grains, and fertilizers, along worldwide shipping routes, and are, or are expected to be, employed primarily in the spot market or in spot market-oriented pools of similarly sized vessels. As of Dec. 31, 2017, Co.'s operating fleet of 56 vessels consists of 55 wholly-owned or finance leased drybulk vessels and one chartered-in drybulk vessel. Co. also has contracts for the construction of 1 newbuilding drybulk vessel.
Drewry, since 1970, has been providing research and advisory services on the global Maritime and Shipping industries and has established itself as a firm with long history of credibility and expertise on various aspects of the maritime industry. Leveraging this in-depth market knowledge and understanding, we have extended our offering to deliver a unique, independent investment research service on globally listed companies operating in the maritime industry. Under the brand Drewry Maritime Equity Research and in accordance with the FCA, DMER led by Rahul Kapoor and his team, offers fundamental analysis on listed companies. DMER analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight and research data available today. By combining these market-leading resources with seasoned sector expertise and commercial awareness, we are able to offer a highly differentiated and comprehensive investment research service to prospective investors in listed maritime companies. We look at globally listed companies within the following sectors: Port Operators, Container Shipping, Container Manufacturing & Leasing, LNG Shipping, Dry Bulk Shipping and Tanker Shipping. Combine in-depth sector expertise with financial analysis focusing on over 50 stocks globally.
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