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Shipping/Offshore/Shipbuilding
ƒ Dry bulk charter rates soften while tanker rates firm up
Average Baltic Dry Index (BDI) for Q3FY15 on YoY basis has declined ~40%
in spite of average Chinese iron ore inventory increasing by 25% YoY on
account of oversupply of tonnage prevailing in the market. On the other
hand, quarterly average of Baltic Clean tanker Index (BCTI) and Baltic Dirty
Tanker Index (BDTI) firmed up ~31% and 19% respectively in Q3FY15 on
YoY basis. Amongst the categories, Suezmax and Aframax segment showed
strong growth of ~74% and 37% in freight rates. On capacity front, the total
pending order book (till CY16) is still strong with ~214 million dwt yet to be
delivered. The order book breakup YTD 2014 stands at 147.4 million dwt
(20% of current fleet) for dry bulk carriers and 66.4 million dwt (13.5% of
current fleet) for tankers; thereby putting pressure on the freight rates.
ƒ Decline in crude price to support shipping sector margins
Q3FY15E revenue for Idirect shipping universe is expected to grow on YoY
basis by ~10% whereas sequentially revenue growth is expected to remain
flattish as charter rates remained volatile and softened towards the end of
quarter. On EBITDA front, shipping universe is expected to post healthy
growth of 36.5% and 13.6% on YoY and QoQ basis on account of decline in
bunker cost and improved charter rates especially in the tanker segment.
Further, Idirect shipping universe PAT is anticipated to report a profit of
~|203 crore in Q3FY15E compared to | 36 crore in Q3FY14 owing to SCI
posting a profit of | 20.7 crore against a loss of |65.7 crore in Q3FY14. GE
shipping revenue is expected to post growth of ~13% YoY whereas EBITDA
growth is anticipated at 15.7%. For SCI, though revenue growth is expected
at 8.6% YoY but EBITDA growth is anticipated to be strong on the back of
low base effect and lower crude prices.
: Company specific view
GE Shipping We expect revenue to grow ~13% on YoY basis to |881.2 crore. However, inspite
of higher drydocking expense EBITDA margin is expected to improve by 380 bps
QoQ to 46% due to lower bunker cost. Consequently, PAT is expected at |182.5
crore in absence of extra-ordinary income
SCI We expect revenue to grow 3% and 9% on QoQ and YoY basis respectively due to
firming up of charter rates. EBIDTA margin is expected to be higher by 270 bps QoQ
at 19% owing to lower bunker expenses due fall in crude price. In the absence of
any extraordinary item, we expect PAT at | 20.7 crore for Q3FY15E
Source: Company, ICICIdirect.com Research
LINK
http://content.icicidirect.com/mailimages/IDirect_ConsolidatedPreview_Q3FY15.pdf
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
Shipping/Offshore/Shipbuilding
ƒ Dry bulk charter rates soften while tanker rates firm up
Average Baltic Dry Index (BDI) for Q3FY15 on YoY basis has declined ~40%
in spite of average Chinese iron ore inventory increasing by 25% YoY on
account of oversupply of tonnage prevailing in the market. On the other
hand, quarterly average of Baltic Clean tanker Index (BCTI) and Baltic Dirty
Tanker Index (BDTI) firmed up ~31% and 19% respectively in Q3FY15 on
YoY basis. Amongst the categories, Suezmax and Aframax segment showed
strong growth of ~74% and 37% in freight rates. On capacity front, the total
pending order book (till CY16) is still strong with ~214 million dwt yet to be
delivered. The order book breakup YTD 2014 stands at 147.4 million dwt
(20% of current fleet) for dry bulk carriers and 66.4 million dwt (13.5% of
current fleet) for tankers; thereby putting pressure on the freight rates.
ƒ Decline in crude price to support shipping sector margins
Q3FY15E revenue for Idirect shipping universe is expected to grow on YoY
basis by ~10% whereas sequentially revenue growth is expected to remain
flattish as charter rates remained volatile and softened towards the end of
quarter. On EBITDA front, shipping universe is expected to post healthy
growth of 36.5% and 13.6% on YoY and QoQ basis on account of decline in
bunker cost and improved charter rates especially in the tanker segment.
Further, Idirect shipping universe PAT is anticipated to report a profit of
~|203 crore in Q3FY15E compared to | 36 crore in Q3FY14 owing to SCI
posting a profit of | 20.7 crore against a loss of |65.7 crore in Q3FY14. GE
shipping revenue is expected to post growth of ~13% YoY whereas EBITDA
growth is anticipated at 15.7%. For SCI, though revenue growth is expected
at 8.6% YoY but EBITDA growth is anticipated to be strong on the back of
low base effect and lower crude prices.
: Company specific view
GE Shipping We expect revenue to grow ~13% on YoY basis to |881.2 crore. However, inspite
of higher drydocking expense EBITDA margin is expected to improve by 380 bps
QoQ to 46% due to lower bunker cost. Consequently, PAT is expected at |182.5
crore in absence of extra-ordinary income
SCI We expect revenue to grow 3% and 9% on QoQ and YoY basis respectively due to
firming up of charter rates. EBIDTA margin is expected to be higher by 270 bps QoQ
at 19% owing to lower bunker expenses due fall in crude price. In the absence of
any extraordinary item, we expect PAT at | 20.7 crore for Q3FY15E
Source: Company, ICICIdirect.com Research
LINK
http://content.icicidirect.com/mailimages/IDirect_ConsolidatedPreview_Q3FY15.pdf
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