Chek the Channels
Tuesday, January 28, 2020
Scorpio Bulkers (SALT)
Weakness Takes A Toll, But Rebound Expected
Scorpio Bulkers Inc is a shipping company based in Monaco. It owns and operates a fleet of modern mid to large-size dry bulk carriers which provide marine transportation for major bulks, which include iron ore, coal and grain and minor bulks which include bauxite, fertilizers and steel products internationally. In terms of its dead weight tonnage, its vessels are classified as Capesize, Kamsarmax and Ultramax, by the order of highest to lowest capacity, with Kamsarmax accounting for the highest revenue.
Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Adjusted 4Q2019 EBITDA of $20.0 million well below expectations. The main reasons for the negative variance were lower TCE rates, higher opex/G&A expenses and higher downtime for scrubber installations. Non-cash items include gain in STNG investment of $47 million and asset write down of $25 million.
Dry bulk market weakness accelerating into 1Q2020. The Baltic Panamax Index (BPI) average of 814 so far in 1Q2020 is down 52% from 1,461 in 4Q2019, and the Baltic Supramax Index (BSI) average of 542 so far in 1Q2020 is down 43% from 956 in 4Q2019. While IMO2020 adjustments to the indices have been partially to blame, the dry bulk market has clearly been weaker than expected and...
This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.