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Wednesday, 24 February 16
THIRTEEN - NOT ALWAYS AN UNLUCKY NUMBER? - CLARKSONS
 Back in early 1999 the price of a 5 year old Panamax bulkcarrier dipped to $13.5m, and ever since analysts have hailed purchase decisions made at that time as some of the most lucrative shipping deals ever seen. Today, with the price back at $13m, perhaps it’s a good time to reflect on how successful investors were back in 1999 and whether there are similar opportunities once again.
What Was The Deal?
The graph shows for each year since 1990 the return that would have been generated by the purchase of a 5 year old Panamax bulkcarrier at the start of the year, the subsequent operation for ten years at the prevailing one year timecharter rate and then the sale of the unit at the end of that period as a 15 year old (for units purchased in 2007 and later, disposal at start 2016 was assumed). At the end of 1999 investors could pick up a 5 year old Panamax bulker for $14m. Trading that vessel at the start year one year timecharter rate for 10 years would have generated estimated earnings of $66.5m (after opex), and then as a 15 year old unit in 2009 the vessel could have been sold for $12.5m. That’s a small loss of $1.5m on the asset but still a total return of $65m, and an impressive internal rate of return (IRR) of 26%.
Playing Snap
A few years later, 5 year old Panamax bulkcarrier purchases did perhaps even better. Buying a 5 year old in 2002, once again at $14m, trading at the timecharter rate and selling as a 15 year old would have generated total returns of $73.2m and an IRR of 41%, whilst the equivalent project in 2003 would have generated $66.1m and an IRR of 44%. These vessels would have generated boom earnings earlier in the project period, subject to a heavier weighting in terms of the internal rate of return calculation.
Not Always A Good Hand
However, not all investors are so lucky. In this example, 5 year old ships purchased since 2008 (and sold this year, so admittedly with less time to hit upon a period of boom earnings) generated negative returns, and those purchased pre-1995 an average IRR of 7%. Buyers in 2008 would have lost a whopping $82.1m on the asset. Nevertheless, there was clearly a golden period; in the years 1998-2006 investors would have achieved an IRR ranging between 20% and 44%.
Unlucky (Or Lucky) 13?
So for those who have had the stomach to buy in at difficult times, there have been more than ample rewards. Today the price of a 5 year old Panamax is back at $13m. Dry bulk fundamentals, particularly on the demand side with the Chinese economy maturing, don’t look helpful at all (see SIW 1207), but with the 5 year old price at almost half that of a newbuild, who really knows what the longer-term opportunity might be?
Fortune favours the brave, but they also say that fools rush in. The outlook seems scary but investors might also have half an eye on their peers who invested at low points in the price cycle in the past. That’s the beauty of volatile and cyclical sectors, but it’s tricky food for thought for shipping investors. Are they willing to party like it’s 1999? Have a nice day.
Source: Clarksons
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Tuesday, 01 March 16
CAN BULKCARRIER SUPPLY CUTS RESTORE SOME BALANCE? - CLARKSONS
The easing in bulkcarrier deliveries and the accelerated pace of demolition in recent years has seen bulkcarrier fleet growth slow from a rapid 17% ...
Monday, 29 February 16
BALTIC INDEX INCHES UP THIS PAST WEEK AS SMALLER VESSELS LEND SUPPORT
COALspot.com: The freight markets rose slightly this past week.
The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measure of global ...
Monday, 29 February 16
LOSS OF EARNINGS IN THE WAKE OF A COLLISION - GARD
KNOWLEDGE TO ELEVATE
A shipowner’s loss of earnings can form a significant part of a collision claim. Awareness of the ways of calculati ...
Friday, 26 February 16
U.S WEEKLY COAL PRODUCTION UP SLIGHTLY
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 13.4 million shor ...
Thursday, 25 February 16
DRY BULKERS ARE SCRAPPED AT RECORD PACE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The newbuilding market is at a lull these days, as ship owners are focusing on two fronts, getting rid of excess dry bulk tonnage and snapping up b ...
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Showing 2546 to 2550 news of total 6871 |
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- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
- Coalindo Energy - Indonesia
- Makarim & Taira - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Vedanta Resources Plc - India
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Central Java Power - Indonesia
- Binh Thuan Hamico - Vietnam
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Independent Power Producers Association of India
- International Coal Ventures Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- San Jose City I Power Corp, Philippines
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Wood Mackenzie - Singapore
- Mjunction Services Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Carbofer General Trading SA - India
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Posco Energy - South Korea
- Madhucon Powers Ltd - India
- Thiess Contractors Indonesia
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Electricity Authority - India
- Chettinad Cement Corporation Ltd - India
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining Corp, Philippines
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- Romanian Commodities Exchange
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Interocean Group of Companies - India
- Indo Tambangraya Megah - Indonesia
- Agrawal Coal Company - India
- Alfred C Toepfer International GmbH - Germany
- Sical Logistics Limited - India
- Salva Resources Pvt Ltd - India
- Heidelberg Cement - Germany
- SMG Consultants - Indonesia
- MS Steel International - UAE
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Banpu Public Company Limited - Thailand
- Tamil Nadu electricity Board
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Energy Development Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Trasteel International SA, Italy
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- Bhushan Steel Limited - India
- Savvy Resources Ltd - HongKong
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Minerals Council of Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- Indogreen Group - Indonesia
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Parry Sugars Refinery, India
- GMR Energy Limited - India
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- Bhatia International Limited - India
- Marubeni Corporation - India
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- The Treasury - Australian Government
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
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