Q2 was yet another rough quarter for SAS, and while the outlook for the summer looks bright, it has so far made limited progress in its discussions with its various stakeholders regarding the burden-sharing in SAS Forward. Given the upcoming equity issue and debt conversion with likely significant shareholder dilution, we reiterate our SELL and SEK0.10 target price.
SAS’s elevated debt level and uncompetitive cost position remain challenging as there has been limited, if any, progress in its restructuring programme. We reiterate our SELL and have lowered our target price to SEK0.1 (0.4) on estimate cuts and the risk of significant dilution if the restructuring proves successful.
Although Q1 losses far exceeded our expectations, focus has been on the upcoming financial and operational restructuring, where SAS aims to convert debt to equity, raise new equity and cut costs by an extra SEK3.5bn p.a. We reiterate our SELL and SEK0.4 target price as we still find the stock overvalued, with significant dilution likely in April’s restructuring.
We consider this a negative report, with figures below expectations and a confirmation SAS is heading for a significant restructuring, of which SEK7.5bn in cost cuts is needed to make it investable, with more equity needed. We expect consensus PTP to fall by c20% and that a negative share price reaction is warranted.
With a Q1e PTP loss of SEKc1.9bn, elevated debt and an uncompetitive cost position, SAS seems as though it is edging closer to bankruptcy unless it can undergo restructuring. We reiterate our SELL, and have cut our target price to SEK0.4 (1) to reflect reduced estimates and increased financial risk.
Although the Q4 losses were lower than consensus forecast, SAS is still loss-making and it expects cash burn to increase going into the winter, while its balance sheet looks stretched against a subdued market outlook. We reiterate our SELL and SEK1 target price.
We consider this a slightly positive report for SAS, including lower than expected losses and positive cash flow. However, as the outlook remains subdued, the balance sheet is stretched and profitability absent we expect no significant 2022 consensus revisions.
We expect weak fiscal Q4 (August–October) results (due at 08:00 CET on 30 November), with passenger numbers c60% below Q4 2019 and rising Covid-19 cases globally yet again creating uncertainty. We still find the valuation rich, with its adj. EV c40–55% above historical levels. We reiterate our SELL and SEK1 target price.
Ahead of the Q3 results, due prior to market open on 18 November, we have updated our near-term charter-employment forecasts to account for more forward fixings as congestion endures. Hence, we have lifted our 2022–2023e EBITDA by 9–13% and find the current valuation at a steep disconnect to underlying asset values, while seeing potential upside to our forecast EBITDA contributions from vessels rolling off charters. We have upgraded to BUY (HOLD), but lowered our target price to NOK24.4 (27.0).
SAS reported underlying Q3 figures more or less in line with our estimates and a better than expected cash burn. However, it now sees a slightly slower ramp-up of capacity going into the winter season, given still-high Covid-19 uncertainty and different possible recovery paths for leisure and business travel. This could affect Q4, which typically has a higher share of business travel. We reiterate our SELL and SEK1 target price.
We consider this a mixed report for SAS, including slightly lower than expected revenues, a better cash position and cash burn, and net profit in line with our expectation. We expect to make limited changes to our 2021e EPS on the back of the results and believe a neutral share price reaction is warranted.
We expect weak fiscal Q3 (May–July) results (due at 08:00 CET on 1 September), with passenger numbers 75% below Q3 2019 and rising Covid-19 cases globally creating uncertainty. We still find the valuation rich and adj. EV c45–60% above its historical average/median. We reiterate our SELL and SEK1 target price.
The freight market cycle extension, which in our view previously relied on faith, is in fact materialising with congestion again taking a turn for the worse, likely elevating rates even further before the inevitable decline at some point in the future. As we are approaching meaningful potential for contract renewals, we find the risk/reward increasingly reasonable. We have upgraded our recommendation to HOLD (SELL) with a target price of NOK27 (23) as we now see increased visibility on near-term...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
According to MPCC and in line with our estimates, the company has fixed more than 40% of its 2022 days which, adjusted for our estimated incremental contractual coverage, yields our 2022e EBITDA of USD304m, roughly in line with consensus. Should congestion remain, we estimate current TCE freight market rates would correspond to an EBITDA above USD400m for 2022e and more than USD500m for 2023e. However, we downgrade to SELL and lift our target price to NOK23 (16.7) as we see peak nearing
MPC Container Ships (MPCC) is set to add 11 feeder vessels to its fleet in a cash/share deal after agreeing to acquire Songa Container AS for USD210m. The deal would add further operating leverage in a buoyant container market at an attractive price, in our view. Adjusted for the acquisition, the implied 2021 EBITDA guidance mid-point was lifted in line with our estimate, with still-significant potential for 2022–2023e at current freight rates. A webcast is scheduled at 10:00 CEST.
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