Monday, August 31, 2020
Grindrod Shipping (GRIN)
Better Than Expected 1H2020 Results. Firmer 2H2020 Outlook.
Grindrod Shipping, originated in South Africa with roots dating back to 1910. The company is based in Singapore, with offices around the world including, London, Durban, Cape Town, Tokyo and Rotterdam. Its primary listing is on Nasdaq and secondary listing on the JSE.
Grindrod Shipping owns and operates a diversified fleet of owned, long-term chartered and joint-venture dry-bulk and liquid-bulk vessels across the globe.
Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Reported adjusted 1H2020 EBITDA of $28.8 million was a sharp improvement over 1H2019 number of $14.7 million and strong dry bulk TCE rate outperformance continued. Adjusting for IFRS 16 adoption, we calculate that adjusted EBITDA was $21.2 million in 1H2020, which was above expectations due to forward cover and the cargo centric focus.
TCE rate outperformance continued in 1H2020, with Handysize TCE rates $2,067 (56%) above the BHSI index, and Supramax/Ultramax TCE rates $3,444 (60%) above the BSI-58 index. The outperformance versus the indices generated almost $20.0 million of additional TCE revenue, or $7.0 million in Handysize and $12.2 million in Supramax/Ultramax.
Adjusting 2020 EBITDA to reflect better than expected 1H2020 operating results and firmer dry bulk market. Given the positive variance in 1H2020 and the firmer state of the dry bulk market, we are increasing our 2020 EBITDA to $46.0 million from $39.8 million. There is some visibility into the 2H2020 due to forward cover, but the majority of …
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.