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Another point to note is that they are planning to acquire 1 more ship in current times which could be a good thing if used properly. Gaining the market share in times of crisis will put the company in a better position when it rides out of the storm.
If it doesn't kill you, it makes you stronger.
'm casting my eye on this company's movement and progress through this period. For fellow interested parties, let's share views and opinions on this counter.
From FA point of view......CM has an interesting business model managed by v experienced shipping hands.. Management have fully exploited the benefits of the high bulk shipping rates (indicated by BDI - Baltic Dry Index) over the past few years - peaked at about 12,000- and have generously rewarded shareholders.
From 3Q08 results, the following are some numbers.
Ship assets - USD51m.......Spore 7.2c per share
Cash - USD 65.5m.....Spore 9.3c per share.
NAV - US cents 11.02........Spore 16.5c per share.
As CM mostly does spot charters, its fortunes are closely tied in to the BDI. In 3Q08, they were still able to show reasonable profits cos BDI was between 9,800 to 5,500 (falling) during that period........
However, today BDI has plunged further to about 800........This is the level of 2001 to 2002......when oil price was about USD20 per bbl.....i.e lower operating cost. CM's revenues and profits will definitely be severely affected.
Whilst at last traded price of 11.5c (S$) the asset backing seems attractive, the concern is whether the poor shipping rates will result in CM burning its cash horde to sustain its operations.......the next 1 or 2 quarters will tell. Perhaps the management may have something up its sleeves.
Operating cash flow - USD10m.....Spore 1.4c per share
I've done a short writeup on this company at www.bear-analysis.blogspot.com
For people interested and watching this company, do come and take a look and share your opinions with me.
Cheers