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http://www.apl.com/india/html/news_20130422_2.html
NOL liner arm APL announced GRI US400 on Asia to US/Canada trade route on May1. Got high chance they managed to get a better rate for transpacific compared to 2012 rate since May1 is the start of the renewed contract service. Again we need to verify it on 2Q13 due on August.
Problem with NOL is poor fiscal result, losses for 2 years. Currently share price is responding to economic data ( US/China PMI, GDP, job data etc).
Still got like 16 trading days before 1Q13, it should provide a relief rally for share price due to rebound earning ( 1 time non reoccurring gain 196M + CNY Peak Season Surcharge). But this share is one big mover, positive economy data can sent price up 15-20% regardless of fiscal result same for poor data down 15-20%. 2Q13 would be vital as it give us a glimpse into the renewed rate for 2013 which could meant profit or loss. Good thing is bunker surcharge in Apr/May might pop up 2Q result. For investors they got to hang out a bit longer before they get a relief after 1Q13. punters just had to stay out from this counter till trading trend is established.
It will not go down below $1.00 even dip for an hour maybe but will rebound above $1.00 even so within the day.
Tomique ( Date: 23-Apr-2013 10:02) Posted:
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In the absence of positive news, NOL might move down below $1 and then onto 90 plus cents. Then will be a good buy.
NOL only use half of the US 1.5 billion MTN loan from the banks. This year high chance of earning recovering due to 1 time non reoccurring profit of NOL building that had been completed in Feb. Oil price also dipped below US100 and would further reduce the operating cost by 1-1.5%. Transpacific and Intra-Asia rate this year might get a better rate this year due to improved growth prospect than 2012. Time to strike in May when 1Q result is out. 1Q13 result might be the best performing quarter in 2013 due to 1 time gain of 196M + CNY PSS. Waiting for brokerage house rerating of NOL before jumping in the market after 1Q13 is out in may.
dippyboy ( Date: 18-Apr-2013 18:41) Posted:
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Just had to endure the market turmoil for now. Those who made a lot of money is those who can prevail in hard time.
The previous CEO is a European typically the welfare type so lot of wastage and inefficiency. April - Jun is time where most of the new ships is coming online and freight rate would be jumping up and down balancing. Good thing is currently oil is correcting to the economy condition falling below US100 dropping 20 from Feb peak. Every 10 drop in oil = 1% drop in operating expense for liners.
By the way the actual freight rate charged by liners don correspond to the market rate. Market rate only tell us the shipping demand/supply trend. Freight rate between retailers and liners was kept confidential, only way we know is through 2Q fiscal result, last time we can know through the monthly operational report but it was removed in 2011 to save on cost.
Still dropping... Think will offload soon b4 I lose everything
Well Nol barely has enough cash to pay off the incoming debts due and one havent factor in this years losses from continued low freight rate.More debt and the interest rate spikes up and renders the still good cashflow worse off. Rights issue is a convenient excuse and an inevitable course.If china goes into a recession then we can have a look at the independence of bank lending policies.If banks are willing to lend to such businesses with high debt risks ....why so.
I have a high opinion of the current CEO who managed to rid so much fatty fluff and inefficiencies chock up by his predecessor during the short boomtimes. However a good mgmt in a bad business is not much of a good thing. Maybe a bad mgmt can help deliever the much needed industry cleansing of poorly run businesses and new entrepreneurs have a chance to build up a lean mean business to compete.
Basically the prev CEO chock up the massive debt by ordering at high cost new ships before he left.So this shit have to be clean up by our SAF scholar who is doing a fantastic job given no prior experience .If you look at Maersk which did not ordered so many ships during boom time at such high cost but rather chose to retrofit many of their ships now for better bang for bucks, you wil see a mgmt that is prudent in controlling cost and values shareholders risks and returns by investing at opportune time, instead of reckless reactive strategies that was poorly conceive and lack foresight.
http://www1.chineseshipping.com.cn/en/indices/scfi.jsp
Die lah. April is coming, freight rate is still lower than last year. Last year make loss, how this year can make profit. Die liao lah. Wahahahahahaha!!!!!!!!! Prepare for right issue. Wahahaha!!!!!!!
Not vested... but I suppose NOL has the resources support & resolve to prevail over time...
Meanwhile the selling of NOL shares continues while the paper general conducts the restructure.
sgng123 ( Date: 18-Apr-2013 15:13) Posted:
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Don need the experience of running a shipping line.The army colonel is there to do restructuring meaning burning bridge with ship owners by not renewing their charter and laying off staff to cut cost. A lot of shipping CEO don like to destroy their relationship in the shipping industry, so getting a outsider to do the dirty job. The army colonel is acting under temasek order and he just need to follow the restructuring plan already been lay out. After 1-2 years when the shipping industry stabilised, he would step down and enjoys his restructuring bonus money for retirement.
Sometimes I wonder what does an army chap know about running a national shipping line.
sgng123 ( Date: 18-Apr-2013 12:47) Posted:
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Budget airlines not a buy unless oil go down a lot since any movement on oil would result in a live or die for them.
At least NOL don need to beg shareholders for more money to cover loss, they had already anticipated it 2 years ago and got US1.5 billion MTN guarantee from banks. Half of the MTN is already used to jack up the cash position and they looking at investing the money in logistics business to double the revenue from logistics from 15% to 30%. Maybe the army col might want to buy PSA since it is owned by temasek too like DBS trying to buy Indonesia bank owned by temasek for 8Billion. IT is like government moving money from left pocket to right pocket lol.
dippyboy ( Date: 18-Apr-2013 04:56) Posted:
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Everyone had to hang on for a couple of week before 1Q13 result. Currently commodities bull cycle is winding down, fund managers / hedge fund are selling off their decade old buy positions built up. NOL share most likely would be dragged down lower. Once they finished with the unwinding, commodities would be back to where they are 12 years ago, so don go rush in olam,wilmar,noble and oil related stock cos it would go lower by the year. A lower oil price is good for economy recovery and help to lower cost for transportation stocks, prepare for a better 2nd half for transportation stocks. SIA and NOL might be hot pick in second half due to lower oil and gradual economy recovering.
Bdi does not track container ships at all...
Yes, just like how that crappy tiger got bailout in a rights issue only to totally expense the amount in operation expense and now having to come back begging shareholders for more money to bleed.If you add up the total cash involved which is near half a billion?, that is enought create a brandnew business from scratch ,less the headache clearing that angmoh shit.Sometimes, trying to repair broken stuffs will cost more than a better brand new one. Poor man buy twice.
Money losing businesses should be liquidated.New more efficiently managed lines can be created once lousy ones go bankrupt. bailing out irresponsible people is no different from state communism planning. Democracy and Capitalism should be upheld in principle and tax payers shouldnt be held hostages by too big to fail scare tactics.
NOL is for the gutsy players, if cannot tanhan huge price swing better switch to low beta stock.
BDI is the comprehensive freight index for everything shipped including commodities, SCFI ( Shanghai Container Freight Index) is what we normally refer to. But the swing in SCFI is not reliable future indication for NOL share price movement, many stock analysts got fooled by it last year when the index hit multi year high. For NOL future earning, just focus on yearly rate negiotation + Peak Season Surcharge + bunker fuel surcharge + global oil price movement. GRIs is carriers way to ensure freight rate is stable for next year renewal for their yearly contact. As long they do not go into rate war and destroyed rate for next year, still can make money if do enough cost saving. Don worry too much since 67% of NOL are owned by temasek and they had already dumped US4billion to renew fleet. They Die die would push up share price when financial condition improve. Just take a look on olam and you know what I talking about, government owned companies would be saved by tax payers money.
With just 357m net current asset(close to what was sold for its HQ) , which can be easily wiped out this year from shipping losses incurred due to BDI index falling from 1100 back to 875.Absolutely possible since prev year had 414m loss.
The remainding non current assets of 5.7b has 3.8b of liabilities mainly bank debt. Most of the nca are old ships which can hardly be sold for scrap value due to the abundant global capacity.In liquidation , one can only wonders whats the real value left.,its possible the bank will likely own the entire assets and common share holders will be wiped out.
This year there is 429m debt due which one wonders how the company is going to pay if it sustain losses from the continued low BDI prices.Next year there is another 674m and 404 m thereafter.
One can only assume in event of continued poor BDI coy losses will force it to raise debt at high interest to pay off this years dues or by next year a desperate rights issue to cover the payments.
Given its the sole sg shipping line , rights will likely be subscribed but it wont be pleasant for shares holders to fork out more $ to bleed in a loss making business.
Whats amazing is it still fetches $1.1 market value when liquidation value is practically scrap metals .Given multiple small shippers going belly up the last few years and even stxosv, china cosco struggling, if without bank support, it would have to seek bankrupcy protection. Basically its a survival of the fittest will the last few biggest shippers with economies of scale and generous financing that can remain . Only when the xcess capacity is liquidated from bankrupty will the industry see some light from a global recovery.That can be years away.
Even if miraculously its starts earning it way thru, it would have to take a long time to pay off 3.7b of debt since just the interest payment is hefty.Not much upside and alot of downside and xtremely expensive market value for a massively indebted loss making business with a superior competitor maersk it cant match .
Just shows how inflated current general market valuations are when such business can still be sold for book value and ultra speculative pennies at stratospheric prices .This is a 4 years old mature bull market, give it abit more to go and this bubble market would have a rude awakening from another crisis lurking in the corner. Enjoy while the ample liquidity last.Better do your own homework to verify data.Personal opinion, disclaimer applies.
Gold had finally caved in and commodities are all correcting to real world growth. Currently Brent oil is below US100 and soon bunker fuel would fall below US600/ton metrics. If the rout on gold continue, it going to be good for transport stocks since fuel price plays a big chuck of the operating cost. It is the classic trend of a sustainable recovery undergoing, price of commodities need to be correcting in order to boost growth. Let wait and see if gold can hold onto US1300 if that is beached, prepared to see big drop in gold/commodities since gold is the benchmark for commodities rally.