60North Investments Posted December 6, 2014 Share Posted December 6, 2014 Wrote some comments on Twitter about the results, I don't see the results as being bad either. Supramax and Panamax rates have been higher so far in Q4. If they don't crash in December then I think we'll see something like $9k TCE rates for the quarter, meaning again roughly $3m in cash flow. There's $5m of debt to repay in Q4, for which they can use $1m from existing cash, $2-3m from cash flow and the rest $1-2m from the untapped loan from management's company called Firment. As intensityjp said, it was good to hear they're discussing the refinancing of the loan repayments next year. Will be looking forward to Monday's CC to hear what they have to say. For me the thesis is still first about their ability to refinance next year's debt successfully which market will either reward or not, and then after that it's about the day rates at least keeping on the level where they have about $9k per day. By the end of 2016 in a neutral scenario they've paid down debt so that there's around $55m of net debt and they have at least kept the current cash flow level, leading to $10-12m FCF per year. Putting a 8-10 multiple on that and you get to a range of $25-65m market cap. For some it might not be enough of a return with the risks in play here. I think it's a nice play still where small changes upwards in rates can lead to very big upside and small changes downwards lead to much less downside (considering they'll be cash flow positive with very low day rates). Link to comment Share on other sites More sharing options...
yadayada Posted December 6, 2014 Share Posted December 6, 2014 I think this is a long term option. One good year in the next few years, and it generates its market cap in cash. And management is not raping shareholders here, which is obvious by now. Link to comment Share on other sites More sharing options...
intensityjp Posted January 7, 2015 Share Posted January 7, 2015 http://marine-transportation.capitallink.com/interviews/index.html?articleID=oSdiC1GiX6EFIZi An interview with our CEO Georgios Karageorgiou Link to comment Share on other sites More sharing options...
yadayada Posted January 7, 2015 Share Posted January 7, 2015 wait what, he said the new financing is in the progress of being finished. And it will save them 2000$ per day per vessel? I didnt get that part. That would be 3.5 million in extra csah flow per year.. That does not make sense. He kept breathing in the mic, very distracting. Link to comment Share on other sites More sharing options...
60North Investments Posted January 7, 2015 Share Posted January 7, 2015 wait what, he said the new financing is in the progress of being finished. And it will save them 2000$ per day per vessel? I didnt get that part. That would be 3.5 million in extra csah flow per year.. That does not make sense. He kept breathing in the mic, very distracting. Yep, I heard the exact same thing. I'm kind of amazed that he actually said (had to listen to it twice to make sure) that the refinancing is probably finished within Q1, and that they will save in the process. I thought that would be something that you wouldn't reveal in an interview like that, but in a press release? Couldn't help buying some more shares. Link to comment Share on other sites More sharing options...
yadayada Posted January 7, 2015 Share Posted January 7, 2015 Yeah so if you think rates stay depressed for another decade, then run off equity value is probably around 40-50m at least? 25m seems cheap. A dividend will probably be the catalyst. And a good Q4 with low oil and relatively high BDI rates. It seems with the BDI oscilating around 1k, they get about 10m in ebitda. Also the weird thing is, he said they will save more in interest per year then they actually pay. Which seems strange. Or did I misheard, was it about something else? Link to comment Share on other sites More sharing options...
60North Investments Posted January 8, 2015 Share Posted January 8, 2015 Listened to the interview a few more times and sure, as yadayada posted above, he says that according to their calculations the new financing should lower their opex per day per vessel by $2000, and later he again says something along the lines "this is a major development because it will lower our cash flow break-even per day per vessel by approximately $2000". But can this really be? Their daily opex has been between $4000-$4500 lately. Wonder if I'm missing something here or did he just speak wrong numbers? My base scenario is basically such that they will keep churning 10m FCF for the next 2-3 years and paying down the debt at 10m per year. This would leave them with about 55m in net debt at the end of FY2016. Putting a 9x multiple on that 10m FCF you have 90m EV, and with 55m net debt the market cap would be 35m. This doesn't look super appealing, but if they manage to keep FCF at 12m where it has been for last two years and give it the same 9x multiple and assume net debt of 50m, you have a market cap of 53m. Might not appeal to everyone but I like it enough to have it as a smallish position. Link to comment Share on other sites More sharing options...
intensityjp Posted February 2, 2015 Share Posted February 2, 2015 http://www.ft.com/cms/s/0/973bdf56-a8a4-11e4-ad01-00144feab7de.html interesting article on the state of the dry bulk market. Link to comment Share on other sites More sharing options...
Guest Schwab711 Posted February 2, 2015 Share Posted February 2, 2015 http://www.ft.com/cms/s/0/973bdf56-a8a4-11e4-ad01-00144feab7de.html interesting article on the state of the dry bulk market. Can you copy/paste the article or parts of it? Don't know if that breaks any rules but it's blocked for me and I would be really interested in reading it. Link to comment Share on other sites More sharing options...
peter1234 Posted February 2, 2015 Share Posted February 2, 2015 Google Bulk commodity shipping rates fall sharply ;) Link to comment Share on other sites More sharing options...
Guest Schwab711 Posted February 2, 2015 Share Posted February 2, 2015 Google Bulk commodity shipping rates fall sharply ;) Haha thanks. First day on this internet thing. Link to comment Share on other sites More sharing options...
yadayada Posted February 2, 2015 Share Posted February 2, 2015 Glad I sold. I guess ill buy in when it trades for <1x Cash flow. Allthough it does look cheap now at 30% book value. Link to comment Share on other sites More sharing options...
intensityjp Posted April 16, 2015 Share Posted April 16, 2015 http://seekingalpha.com/article/3038336-globus-maritime-eager-to-stay-afloat SA article on GLBS Link to comment Share on other sites More sharing options...
DTEJD1997 Posted April 27, 2015 Author Share Posted April 27, 2015 Hey all: Anybody notice that GLBS was up in price today? Up $.48 to $1.90. In fact, I would be surprised if it were not the #1 gainer... Somebody must have had advance notice of earnings, over 200k shares traded. Looks like the one ship is no longer for sale? Decent earnings in a terrible environment...need to possibly raise capital? Any thoughts? Link to comment Share on other sites More sharing options...
60North Investments Posted April 28, 2015 Share Posted April 28, 2015 I have no idea who was behind those trades yesterday but the report looked very promising to me. The biggest thing that I found there was in page 7 where they state that they took a new $30m loan from HSH Nordbank and used that to partly repay the Credit Suisse loan that was expiring this year. Now it seems like this year they'll have to repay $5m for Credit Suisse, $5m for HSH Nordbank ($0.7m per month beginning in June 2015) and $5m for some other loan that I can't recall now, $15m in total. With the insider loan (Firment) they increased the limit from $4m to $8m and also moved maturity date from Dec 2015 to Apr 2016. Obviously the operating results aren't that pretty when the dry bulk market is where it is. Still, Globus was cash flow positive in Q4. The CEO said that cash flow for 2015 may not be enough to comply with liquidity requirements. With the $30m repayment though I don't see how they should have huge issues in FY15 with the remaining $15m that needs to paid back. They have $6m to draw from the Firment facility so they'd need about $9m from cash flow to make it. I feel pretty confident that they'll be able to accomplish that. Then 2016 they'll again need to repay close to $15m. The value creation for shareholders with Globus still comes in my opinion from the debt paybacks. I'm not sure whether it's a flawed view or not, but repaying $10-15m per year should increase the market cap by roughly the same amount, all else equal? http://www.globusmaritime.gr/press/globuspr042715.pdf Edit: somehow misread the press release on the new loan repayment part. It's quarterly payments of $0.7m, not monthly as I wrote. Link to comment Share on other sites More sharing options...
randomep Posted April 30, 2015 Share Posted April 30, 2015 Any comments on Note 2.1 of the 20F. They say they may not be able to meet the loan convenants and consequently may default. They are considering a rights offering...... anybody? Link to comment Share on other sites More sharing options...
60North Investments Posted April 30, 2015 Share Posted April 30, 2015 Any comments on Note 2.1 of the 20F. They say they may not be able to meet the loan convenants and consequently may default. They are considering a rights offering...... anybody? As I understand it, that comes from them breaching the covenant in Kelty Marine Ltd's loan from Commerzbank for Jin Star. In Dec 2014 the amount outstanding was $17.6m, and the covenant they were breaching was "market value of each vessel and any additional security provided, including the minimum liquidity of $1,000 with the bank, is or exceeds 130% of the loan balance outstanding". So Jin Star's market value should be over $21.9m, but it's not according to Globus. In Dec 2012 they were also breaching the same covenant, and then they did this with Commerzbank: "In April 2013, the Company reached an agreement with Commerzbank to prepay $3.0 million together with the next scheduled installment due on June 28, 2013 for the Company to be fully compliant with the provisions of the Kelty Loan Agreement.". In 2015 they need to repay $5m for the Credit Suisse loan, $4.1m for Commerzbank loan (more if they agree on something similar as they did in 2013), $2.1m for HSH Nordbank and $5.1m for DVB bank loans, in total $16.3m. Cash flow isn't going to be enough and there's maybe $1m that can be taken from cash without breaching covenants. I would say that they a) refinance another loan, b) sell some ships (from 10K, "By a unanimous written consent of the Board of Directors dated April 7, 2015 the Company decided to actively market for sale the vessels m/v Star Globe and m/v Sky Globe. As of December 31, 2014 the carrying amount of the vessels was $20,680 and $21,757 while their estimated fair value less costs to sell as of April 15, 2015 was approximately $13,000 and $12,000 respectively.") or c) issue shares (something I hope doesn't happen at these prices). A big drop from book value in those ships by the way.. I'm not sure whether I'm too optimistic but I have a hard time seeing these guys default because they're behind by few millions, especially after they just managed to refinance a $30m loan. Link to comment Share on other sites More sharing options...
randomep Posted April 30, 2015 Share Posted April 30, 2015 No they won't default because they can prevent it. But selling ships or stock is extremely dilutive in this market. Link to comment Share on other sites More sharing options...
DTEJD1997 Posted June 4, 2015 Author Share Posted June 4, 2015 Hey all: Anybody see that GLBS is selling a ship for $5mm? For the life of me, I can't remember what they expected to get earlier, but I am reasonably sure this amount is less than what they expected. Still, $5mm goes a way towards meeting their debt obligations, especially if the BDI goes up a bit later in the year. I believe all their ships are on VERY short term charters. Any thoughts? Opinions? Link to comment Share on other sites More sharing options...
randomep Posted June 5, 2015 Share Posted June 5, 2015 Hey all: Anybody see that GLBS is selling a ship for $5mm? For the life of me, I can't remember what they expected to get earlier, but I am reasonably sure this amount is less than what they expected. Still, $5mm goes a way towards meeting their debt obligations, especially if the BDI goes up a bit later in the year. I believe all their ships are on VERY short term charters. Any thoughts? Opinions? I haven't followed GLBS for a while, can you tell me if they booked a loss on this sale? Link to comment Share on other sites More sharing options...
60North Investments Posted June 5, 2015 Share Posted June 5, 2015 Pretty sure they booked a loss on the sale of Tiara Globe. In the 20F they state the vessel's carrying value in Dec 2014 at $13.6m, so I think there will be a loss (or impairment if they did it before the sale) of about $8m. I think the earlier expectation was to get around $10m, so didn't go as well as was hoped. Still, that $5.5m will no doubt help in making the loan repayments, of which there should be around $16m this year. If they manage to get +$10m in net operating cash flow (after interest) that should do it. +$10m requires a better year than 2014. At least Q1 will be worse, that looks certain. Q2 seems to be lower as well, so need to hope for a lot better H2. I wouldn't perhaps put too high hopes on achieving that (especially with one ship less from June-July onwards), so they most likely still need to a) issue shares, b) refinance another loan, c) sell one more ship. Link to comment Share on other sites More sharing options...
60North Investments Posted June 22, 2015 Share Posted June 22, 2015 GLBS reported Q1 after the market close, links to press release and presentation. As anticipated, not much to cheer. Just by looking at BDI, Q2 (April-June) won't be a whole lot better. Beginning of June has been encouraging for BDI, we'll see if that holds up. Management was hopeful that latter part of the year would be better. Link to comment Share on other sites More sharing options...
randomep Posted June 23, 2015 Share Posted June 23, 2015 OMG...... that's all I can say....... revenue down 60%?? Link to comment Share on other sites More sharing options...
60North Investments Posted June 23, 2015 Share Posted June 23, 2015 OMG...... that's all I can say....... revenue down 60%?? That's what happens when you got day rates down 50-60% compared to last year same period + all ships on spot rates. Quickly glancing the charts I'd guess Q2 will be about 30% worse than year before. EDIT: With two ships being dry-docked in Q2, that 30% might well be worse. Link to comment Share on other sites More sharing options...
DTEJD1997 Posted July 13, 2015 Author Share Posted July 13, 2015 Hey all: ANybody else notice that the Baltic Dry Index has been moving up strongly in the past month? So strong, it has gone from about 650 to 874. Still at low levels, but an interesting move. Meanwhile, GLBS continues to go down and is flirting with a 52 week low. Anybody else tempted to pick some up here? Link to comment Share on other sites More sharing options...
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