Tuesday, August 30, 2022

Grindrod Shipping (GRIN)
Grindrod receives takeover offer

Grindrod Shipping operates a fleet of owned and long-term and short-term chartered-in drybulk vessels predominantly in the handysize and supramax/ultramax segments. The drybulk business, which operates under the brand “Island View Shipping” (“IVS”), includes a Core Fleet of 31 vessels consisting of 15 handysize drybulk carriers and 16 supramax/ultramax drybulk carriers. The Company also owns one medium range product tanker on bareboat charter. The Company is based in Singapore, with offices in London, Durban, Tokyo, Cape Town and Rotterdam. Grindrod Shipping is listed on NASDAQ under the ticker “GRIN” and on the JSE under the ticker “GSH”.

Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Taylor Maritime Investment Limited (TMI) proposed a $26 per share offer to acquire share capital of the Company not already owned by TMI. TMI owned 4,925,023, or 25.9% of the shares of Grindrod as of August 17, 2022.The offer consists of $21 in cash and a $5 special cash dividend to be paid to shareholders. Grindrod has entered into a confidentiality agreement and an exclusivity agreement with TMI whereas TMI has been granting a period to negotiate the proposed transaction. Grindrod has not agreed to terms of the proposal nor its willingness to be acquired. 

The shares of Grindrod rose on the news but remain below spring trading levels and our price target. The shares of GRIN rose 16.73% to $23.93 per share on Monday, the day the deal was announced. The shares of GRIN traded as high as $28.98 on May 20, 2022 but have been weak since that date in response to declining shipping rates and overall market weakness. The company reported very strong financial results for the first and second quarters allowing the company to pay down debt, acquire a vessel, and raise the dividend. As a result, we have maintained our price target of $31 even as shipping rates have declined….

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. 

Thursday, August 25, 2022

Great Lakes Dredge & Dock (GLDD)
More Awards, More Work

Great Lakes Dredge & Dock Corporation is the largest provider of dredging services in the United States. In addition, Great Lakes is fully engaged in expanding its core business into the rapidly developing offshore wind energy industry. The Company has a long history of performing significant international projects. The Company employs experienced civil, ocean and mechanical engineering staff in its estimating, production and project management functions. In its over 131-year history, the Company has never failed to complete a marine project. Great Lakes owns and operates the largest and most diverse fleet in the U.S. dredging industry, comprised of approximately 200 specialized vessels. Great Lakes has a disciplined training program for engineers that ensures experienced-based performance as they advance through Company operations. The Company’s Incident-and Injury-Free® (IIF®) safety management program is integrated into all aspects of the Company’s culture. The Company’s commitment to the IIF® culture promotes a work environment where employee safety is paramount.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

More Awards Announced. Great Lakes Dredge & Dock announced yesterday the Company has received eight new awards that total $107.0 million, with the awards to be completed by the end of the fiscal 2022 year through the second half of the 2023 year. These awards include maintenance projects, an improvement project, and an access channel dredging project. 

Maintenance Projects. The Company was given several maintenance projects, with the largest award ($15.4 million) being in South Carolina and dredging in the Charlestown Lower Harbor. The second largest ($13.0 million, $14.5 million with options) is in Florida and dredging in the Tampa Harbor Entrance Channel. Four smaller projects were bundled in the announcement, but the projects total $14.8 million in awards and are in New York, North Carolina, and South Carolina….

This Company Sponsored 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. 

Thursday, August 25, 2022

Pangaea Logistics (PANL)
Ship Acquisition Follows Balanced Strategy of Growth and Rewarding Stakeholders

Pangaea Logistics Solutions Ltd. (NASDAQ: PANL) provides logistics services to a broad base of industrial customers who require the transportation of a wide variety of dry bulk cargoes, including grains, pig iron, hot briquetted iron, bauxite, alumina, cement clinker, dolomite, and limestone. The Company addresses the transportation needs of its customers with a comprehensive set of services and activities, including cargo loading, cargo discharge, vessel chartering, and voyage planning. Learn more at www.pangaeals.com.

Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Ship acquisition announced. Pangaea announced the acquisition of a 2010-built vessel for US$17.1 million. Management had indicated it was in final negotiations for a ship purchase during its August 18th call to discuss second quarter financial results so the announcement was not a surprise. Pangaea has operated the ship for over a year on a chartered-in basis and had been approached by the owner. The ship will be delivered in September or October. Owned ships typically command higher margin contracts than chartered-in ships so the acquisition should have a positive impact on financial results going forward.

Acquisition follows management’s balanced strategy of growth and rewarding stakeholders. The Board of Directors has raised the dividend twice in the last twelve months although it opted to hold dividends constant in the most recent quarter. It has also paid down debt and capital leases in recent quarters. The ship acquisition will help grow Pangaea’s asset base. Pangaea’s cash position was $102.2 million (up from $40.6 million at this time last year). We believe the company will pay for the ship, which will be renamed Bulk Sachuest, with cash on hand….

This Company Sponsored 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. 

Friday, August 19, 2022

Grindrod Shipping (GRIN)
Another strong quarter

Grindrod Shipping operates a fleet of owned and long-term and short-term chartered-in drybulk vessels predominantly in the handysize and supramax/ultramax segments. The drybulk business, which operates under the brand “Island View Shipping” (“IVS”), includes a Core Fleet of 31 vessels consisting of 15 handysize drybulk carriers and 16 supramax/ultramax drybulk carriers. The Company also owns one medium range product tanker on bareboat charter. The Company is based in Singapore, with offices in London, Durban, Tokyo, Cape Town and Rotterdam. Grindrod Shipping is listed on NASDAQ under the ticker “GRIN” and on the JSE under the ticker “GSH”.

Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Second quarter financial results come in above expectations. Grindrod Shipping reported above-expectation financial results for the most recent quarter boosted by higher-than-expected shipping rates and lower daily operating costs. Reported revenues for the quarter were $161.6 million including $30 million from the sale of a ship. Average TCE rates increased compared to first-quarter rates and surpassed our expectations. This wasn’t just a top-line story. Equally impressive, operating costs per day declined, bucking a trend seen by other shippers. Administrative expense also declined.

The upcoming third quarter might not surpass the second quarter, but it will still be good. Shipping rates have come down in recent months. That said, Grindrod has locked in about 70% of its shipping days at rates not too far below the second quarter. We would expect third quarter revenues to be slightly below second quarter results absent revenues from ship sale revenues….

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. 

Friday, August 12, 2022

Euroseas (ESEA)
Smooth Sailing as Euroseas Rides The Tide of Higher Shipping Rates

Euroseas Ltd. was formed on May 5, 2005 under the laws of the Republic of the Marshall Islands to consolidate the ship owning interests of the Pittas family of Athens, Greece, which has been in the shipping business over the past 140 years. Euroseas trades on the NASDAQ Capital Market under the ticker ESEA. Euroseas operates in the container shipping market. Euroseas’ operations are managed by Eurobulk Ltd., an ISO 9001:2008 and ISO 14001:2004 certified affiliated ship management company, which is responsible for the day-to-day commercial and technical management and operations of the vessels. Euroseas employs its vessels on spot and period charters and through pool arrangements.

Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Solid top-line growth. Euroseas reported 2022-2Q net revenues of $48.5 million up 165% over the same period last year and modestly ahead of our $44.8 million estimate. Higher results reflect vessel additions (1,487 voyage days versus 1,273) and higher shipping rates (TCE of $33,714 versus $14,853). Operating costs rose modestly. Adjusted EBITDA was $34.2 million up from $10.5 million and slightly above our $33.7 million estimate. Adjusted net income was $29.6 million ($4.08 per diluted) versus $7.6 million ($1.11) and our estimate of $28.8 million ($3.96).

Locked-in rates looking good as shipping rates decline. The company has locked-in rates for 98% of voyage days for the rest of 2022, 78% for 2023 and 54% for 2024. Average TCE rates are near $30,000, which is down from this quarter’s TCE rate but still high relative to historical rates. Eurosea’s largest exposure to spot rates comes largely from ships under construction that will be delivered in 2024. Eurosea’s fleet is getting younger and receives premium pricing. Euroseas locked in a TCE rate of $48,000 for two vessels to be delivered in 2023. High TCE rates should result in strong cash flow and earnings levels for the foreseeable future….

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. 

Thursday, August 11, 2022

Pangaea Logistics (PANL)
Another strong quarter

Pangaea Logistics Solutions Ltd. (NASDAQ: PANL) provides logistics services to a broad base of industrial customers who require the transportation of a wide variety of dry bulk cargoes, including grains, pig iron, hot briquetted iron, bauxite, alumina, cement clinker, dolomite, and limestone. The Company addresses the transportation needs of its customers with a comprehensive set of services and activities, including cargo loading, cargo discharge, vessel chartering, and voyage planning. Learn more at www.pangaeals.com.

Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Higher revenues reflect a jump in shipping rates. The company reported revenues of $195.5m up 34% over the same period last year. Higher sales reflect a 29% increase in TCE rates to $27,139. Adjusted EBITDA rose 107% to $44.2 million. The large increase in EBITDA reflects higher revenues combined with only modest increases in operating costs. Net income rose 30% to $25.0 million. 

Next quarter should be good as well. The company has locked in 3,026 shipping days, or about 60% of its rates at a TCE rate of $25,600. Management reports that it has no planned dry dock days for the rest of 2022, so we expect high utilization rates.  Finally, we would note that the upcoming September quarter has 92 days versus lower levels in each of the first two quarters….

This Company Sponsored 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. 

Tuesday, August 09, 2022

Pyxis Tankers (PXS)
Outstanding quarter shows sensitivity to shipping rates

We currently own a modern fleet of five tankers engaged in seaborne transportation of refined petroleum products and other bulk liquids. We are focused on growing our fleet of medium range product tankers, which provide operational flexibility and enhanced earnings potential due to their “eco” features and modifications. We are positioned to opportunistically expand and maximize our fleet due to competitive cost structure, strong customer relationships and an experienced management team whose interests are aligned with those of its shareholders. For more information, visit: http://www.pyxistankers.com.

Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Pyxis reported strong top-line results due to higher shipping rates. Results carried through to earnings. Pyxis reported 2022-2Q net revenues of $16.1 million vs. $7.7 million for the same period last year as higher energy prices and a disruption in global oil flow routes due to the Russia/Ukraine war resulted in higher tanker shipping rates. The average TCE rate for the quarter was $21,070 vs. $12,280 and could go higher in the third quarter with 57% of capacity fixed at $30,500. Meanwhile, operating costs per day declined to $6,181 from $6,697 leading to net income of $4.6 million or $0.38 per diluted versus ($1.4 million) or ($0.16 per share).

Cash flow is strong and the balance sheet is reasonable. Adjusted EBITDA was $7.3 million up from $0.4 million. The company’s cash position has grown to $6.2 million with $73.8 million in debt. Debt represents approximately 60% of capitalization (net debt is 55%). Debt is well supported by a increasingly more valuable asset base. Financing costs are an average 4.6%. The utilization rate for the quarter was 98%, a large improvement above first quarter rates of 74% that suffered from the accidental grounding of a tanker….

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. 

Monday, August 08, 2022

Eagle Bulk Shipping (EGLE)
Eagle Bulk Shipping reports strong 2022-2Q results

Eagle Bulk Shipping Inc. (“Eagle”) is a US-based drybulk owner-operator focused on the Supramax/Ultramax mid-size asset class, which ranges from 50,000 and 65,000 deadweight tons in size; these vessels are equipped with onboard cranes allowing for the self-loading and unloading of cargoes, a feature which distinguishes them from the larger classes of drybulk vessels and provides for greatly enhanced flexibility and versatility- both with respect to cargo diversity and port accessibility. The Company transports a broad range of major and minor bulk cargoes around the world, including coal, grain, ore, pet coke, cement, and fertilizer. Eagle operates out of three offices, Stamford (headquarters), Singapore, and Hamburg, and performs all aspects of vessel management in-house including: commercial, operational, technical, and strategic.

Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Results were up sharply versus last year and slightly above our forecast. Net revenues were $198.7m in the most recent quarter, up 53% versus last year and in line with our $205.0m estimate. Improved sales reflect higher TCE shipping rates ($30,207 vs. $21,580) and more operating days (5,707 vs. 4,778) due to more owned and chartered-in vessels (60 vs. 55). Favorable sales led to a jump in adjusted EBITDA (which excludes hedges) to $102.6m from $6.6m surpassing our $93.4m estimate. The EBITDA surprise was due to lower-than-expected voyage expenses. Adjusted net income was $81.6m ($4.98/diluted share) versus our $73m. 

Charter rates have slipped but still remain above historical averages. Shipping rates declined in the second quarter as fighting in Ukraine and overall global economic concerns affected prices. Eagle has locked in 72% of its shipping rates for the third quarter as compared to an 83% rate in the second quarter leaving it a bit more exposed to spot prices. The fourth quarter is typically the highest-priced quarter due to North American grain shipments. Management believes the market for dry bulk shipping is also favorable with China opening up, Russian and Ukraine grain shipments resuming, and Brazil iron ore supply growing. Management points out that new vessel construction is limited and new orders wouldn’t be completed until 2024….

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. 

Monday, August 08, 2022

Great Lakes Dredge & Dock (GLDD)
Corrected Copy: Income Statement Model

Great Lakes Dredge & Dock Corporation is the largest provider of dredging services in the United States. In addition, Great Lakes is fully engaged in expanding its core business into the rapidly developing offshore wind energy industry. The Company has a long history of performing significant international projects. The Company employs experienced civil, ocean and mechanical engineering staff in its estimating, production and project management functions. In its over 131-year history, the Company has never failed to complete a marine project. Great Lakes owns and operates the largest and most diverse fleet in the U.S. dredging industry, comprised of approximately 200 specialized vessels. Great Lakes has a disciplined training program for engineers that ensures experienced-based performance as they advance through Company operations. The Company’s Incident-and Injury-Free® (IIF®) safety management program is integrated into all aspects of the Company’s culture. The Company’s commitment to the IIF® culture promotes a work environment where employee safety is paramount.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Corrected Model. An incorrect Income Statement model was attached to our second quarter update entitled “When It Rains…” and published August 3, 2022. A corrected version is attached. The error involves our full year 2022 revenue and adjusted EBITDA. The correct numbers are $692.8 million and $89.5 million, respectively, compared to $751.4 million and $89.9 million, respectively, in the prior consolidated income statement. The quarterly information is correct. Throughout the report we reference the correct $692.8 million revenue number. In certain instances, we do reference the incorrect $89.9 million adjusted EBITDA number but the de minimis difference between the two figures does not impact our investment case or valuation of GLDD shares.

…

This Company Sponsored 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. 

Friday, August 05, 2022

Genco Shipping (GNK)
Results rise even as the company takes steps to position itself for the future

Genco Shipping & Trading Limited, incorporated on September 27, 2004, transports iron ore, coal, grain, steel products and other drybulk cargoes along shipping routes through the ownership and operation of drybulk carrier vessels. The Company is engaged in the ocean transportation of drybulk cargoes around the world through the ownership and operation of drybulk carrier vessels. As of December 31, 2016, its fleet consisted of 61 drybulk carriers, including 13 Capesize, six Panamax, four Ultramax, 21 Supramax, two Handymax and 15 Handysize drybulk carriers, with an aggregate carrying capacity of approximately 4,735,000 deadweight tons (dwt). Of the vessels in its fleet, 15 are on spot market-related time charters, and 27 are on fixed-rate time charter contracts. As of December 31, 2016, additionally, 19 of the vessels in its fleet were operating in vessel pools.

Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Genco Shipping reported 2022-2Q results above our estimates but below consensus estimates. Net revenues were $100.9 million vs. $76.0 million last year, above our $97.1 million estimate but below the consensus estimate of $109.1 million. Adjusted EBITDA for the quarter was $64.2 million, up 28% but below our estimate of $67.1 million and the consensus estimate of $67.4 million. Net income was $47.5 million ($1.10 per share) vs. our estimate of $43.6 million ($1.01 per share) and the consensus estimate of $50.5 million ($1.17 per share).

Why were costs up? Daily vessel operating expenses were $7.358/day in the second quarter versus $5,151/day last year. The company is switching technical management companies. The changeover required higher repair and maintenance costs and an increase in the purchase of stores and spare parts. In addition, the company completed an entire crew changeover as ships came into dock. The good news is that the changeover is largely complete and vessel operating expenses are expected to drop to $4,950 in the upcoming quarter….

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. 

Friday, August 05, 2022

Seanergy Maritime (SHIP)
Results in line with recent revisions

Seanergy Maritime Holdings Corp. is the only pure-play Capesize ship-owner publicly listed in the US. Seanergy provides marine dry bulk transportation services through a modern fleet of Capesize vessels. The Company’s operating fleet consists of 17 Capesize vessels with an average age of approximately 12 years and aggregate cargo carrying capacity of approximately 3,011,083 dwt. The Company is incorporated in the Marshall Islands and has executive offices in Glyfada, Greece. The Company’s common shares trade on the Nasdaq Capital Market under the symbol “SHIP” and its Class B warrants under “SHIPZ”.

Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Seanergy reported 2022-2Q results in line with expectations. SHIP reported net revenues of $32.8 million up 18% over last year and slightly above our estimate of $31.1 million. EBITDA of $16.1 million met our $16.2 million estimate and reported net income of $5.9 million ($0.03 per share) was slightly above our $5.5 million ($0.03 per share) estimate. We had fine-tuned our projections last month after a conversation with management.

TCE rates were the main cause for higher year-over-year result although coming in below early guidance. Average Time Charter Equivalent rates were $23,251 for the quarter in line with our $23,000 estimate. Management had forecast a 2Q TCE rate of $24,569 at the end of the first quarter. Shipping rates remain above historical levels but have fallen as the quarter progressed and concerns of a weakening global economy emerged. Still, the overall outlook remains positive as the iron ore and coal trades are active and China begins to reopen….

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. 

Noble on the Road Presents: Great Lakes Dredge & Dock Corporation Investor Day

For more information on this, and other upcoming roadshows, contact:

Barbara Cohen
Managing Director, Investor Outreach & Distribution
Noble Capital Markets, Inc. Direct – (212) 863-3225
bcohen@noblecapitalmarkets.com