| Latest Forum Topics / Neptune Orient L Rg |
 Post Reply
|
|
NOL
|
|||||
|
hem2998
Veteran |
26-May-2014 09:10
|
||||
|
x 0
x 0 Alert Admin |
wats coooking???
|
||||
| Useful To Me Not Useful To Me | |||||
|
Lucky03
Elite |
26-May-2014 09:08
|
||||
|
x 0
x 0 Alert Admin |
Like Tequila, just one shot at 502 lots opening price of 0.995 ? Or another more potent one coming ??? lol :)
|
||||
| Useful To Me Not Useful To Me | |||||
|
|
|||||
|
Lucky03
Elite |
26-May-2014 08:59
|
||||
|
x 0
x 0 Alert Admin |
It opened 0.995 lol :)
|
||||
| Useful To Me Not Useful To Me | |||||
|
hem2998
Veteran |
26-May-2014 08:54
|
||||
|
x 0
x 0 Alert Admin |
LOL..everytime play russian roulette...one day sure kena
|
||||
| Useful To Me Not Useful To Me | |||||
|
Lucky03
Elite |
26-May-2014 08:45
|
||||
|
x 0
x 0 Alert Admin |
Buyer 0.995 call bluff ? Will know in 15 mins. | ||||
| Useful To Me Not Useful To Me | |||||
|
|
|||||
|
sgng123
Supreme |
26-May-2014 01:06
|
||||
|
x 0
x 0 Alert Admin |
actually NOl not a slow mover, just bad luck it is undegoing group restructuring to business model that focus more on efficiency and profit rather than high quality of service. When company undergoing restructuring, every big players either sell off holding or take a wait and see approach, explain why the slow and often stagnant state of the share price. In fact lot of investors getting pissed at the slow pace of reform currently ongoing, temasek kia Si and delayed the fleet renewal progress 1 year later. When NOL actually movr, it not gona be a slow climb, it is normally a astronomical rise to the top then stabilisation just like how it fall from $2.XX to $1.00 under 1 year. Big rise and big fall is ship trait, so if u touching ship fasten ur sit belt when the tide came. Hold ur DD when trading ship joking lol.
|
||||
| Useful To Me Not Useful To Me | |||||
|
Lucky03
Elite |
25-May-2014 16:17
|
||||
|
x 0
x 0 Alert Admin |
The various alliance will start to bite this year.
JOC ? Maritime News ? Container Lines ? United Arab Shipping ?P2? Alliance Takes Shape Peter T. Leach, Editor-at-Large | May 23, 2014 10:03AM EDT In the face of looming competition from new or expanded ocean shipping alliances among the biggest carriers, smaller lines are taking steps to ensure their own long-term survival. United Arab Shipping Co. is a case in point. In the last year it has ordered 17 new post-Panamax container ships to replace its aging fleet, it overhauled its global management structure to place responsibility on trade lanes rather than regions, and it is expanding its vessel-sharing alliance with China Shipping Container Lines on a few key trades where it is adding new services. ?We are the P2,? UASC president and CEO Jorn Hinge said in an interview at the UASC?s regional headquarters for North America in Cranford, N.J. He thinks the planned debut of the P3 Network of Maersk Line, Mediterranean Shipping Co. and CMA CGM this fall -- following delays in getting it approved -- and service consolidations by the G6 and CKYHE alliances will help sustain rates on the Asia-Europe trade because the carriers that belong to them will be able to cut capacity by suspending unneeded port calls or entire sailings. ?Rather than sailing with ships half full, they will suspend a string,? he said. In the last year the Dubai-based carrier teamed up in a vessel-sharing alliance with CSCL on the Asia-Europe and trans-Pacific trade lanes. In April the two carriers launched a new Asia-Europe network with three new services (AEC1, AEC3, AEC4) and two enhanced services (AEC8, AEC9). It added the capacity on that trade with slot exchange arrangements with Hanjin Shipping and Evergreen Marine. Hinge said UASC is also working closely with other carriers, including Cosco, on slot exchanges on other routes. UASC and China Shipping have both ordered huge new container ships that they will pool together in joint services on the Asia-Europe trade when they are delivered. ?The game-changer for us was the cost of fuel,? Hinge said. He said the cost of bunker oil has tripled over the last five or six years, and ?it?s not going to stop there.? Acquisition of the new ships was also spurred by the need to go green. U.S., Asian and European regulators are requiring that ships burn cleaner and more expensive fuel within their territorial waters, and UASC needed a new fleet that would burn less fuel and also cut carbon emissions. It placed the largest order in its history last year when it signed an agreement with Hyundai Heavy Industries that is worth some $2.5 billion. It ordered six 18,800-TEU vessels and 11 14,500-TEU ships. All of the 18,800-TEU mega-ships will be deployed on the trades from Asia to North Europe and the Middle East and Mediterranean. The 14,500-TEU ships will be deployed on the Asia-Middle East route and in the intra-Asia trades, where some of the ports can?t handle larger ships. CSCL has also ordered five new 18,800-TEU ships that will be added to the six ordered by UASC to form a string of ships on the Asia-Europe trade when all are delivered over the next few years. ?We will have only half the headache,? Hinge said. In anticipation of even stricter emissions standards to come by 2020, UASC is equipping the new ships with piping and dual-use engines that will enable it to convert from bunker to LNG fuel. The first 18,800-TEU behemoth is due for delivery later this year in South Korea. ?The size of the ships is not a big deal. It?s the technology on the ships that?s the big deal,? Hinge said. The new ships won?t have the tanks to store LNG when they are delivered, but it will only take about a month to install them on the ships when emissions standards are increased further, which Hinge expects in the next four or five years. UASC is the 17th-largest container line, according to Alphaliner, with a fleet of owned and chartered ships that have a total capacity of 288,756 TEUs. The 19 new ships UASC has on order have a capacity equivalent to 97.6 percent of its existing fleet. It scrapped some of its 2,000-TEU vessels two years ago and plans to return many of its Panamax-sized chartered vessels when the big new ships are delivered. ?They are not the most efficient ships in the world,? he said. UASC had little problem financing the new ships because it is owned jointly by six oil-rich Persian Gulf states ? Bahrain, Iraq, Kuwait, Qatar, Saudi Arabia and U.A.E., with a big recent change being Qatar taking a 51 percent stake in 2013. Hinge said the financing was ?100 percent oversubscribed? by international banks and banks in the Middle East. Though the new ships will add to the overcapacity that already hangs over the Asia-Europe trade, ?[UASC has] to be in the China trade for many years to come,? Hinge said. Last year, UASC overhauled its management organization to consolidate its multiple regional offices into regional headquarters. Hinge said the new regional headquarters will be responsible for managing trade lanes to their regions rather than selling across all trade lanes. They will have responsibility for the profitability of their own region?s trades rather than selling capacity on every trade, which will boost efficiency and cut costs. For example, UASC is closing offices in Cranford, Baltimore, Norfolk and Savannah and consolidating them in a new headquarters for the U.S. trade lanes in Peachtree, Georgia, near Atlanta this coming August. It also consolidated its regional offices in Europe and moved its headquarters for the North Europe trades to Hamburg, Germany. It operates a hub-and-spoke network in other regions, with Algeciras, Spain, as the hub for the trades with West Africa and Latin America Singapore for the Asia-Middle East trades Port Klang, Malaysia for Australasia and Dubai as the hub for the trades between India, the Middle East, the Mediterranean and the U.S. East Coast. It?s too soon to measure the results of the reorganization. UASC only implemented the new organizational structure during the third quarter of last year, with financial reporting under the new system in effect since January, so it will take 12 months to see how it works. ?So far so good, but we need more experience,? Hinge said. Contact Peter Leach at [email protected] and follow him on Twitter: @petertleach. |
||||
| Useful To Me Not Useful To Me | |||||
|
Lucky03
Elite |
25-May-2014 14:21
|
||||
|
x 0
x 0 Alert Admin |
May see more to follow suit if they see upturn and make business sense to delist at current relatively lower cost of taking the firm private.
Golden Ocean considers delisting from Singapore Exchange By Lee Hong Liang from Singapore Dry bulk shipowner Golden Ocean is considering a voluntary delisting from the Singapore Exchange (SGX) due to the low trading volume and a plan to simplify operations and reduce cost. The planned delisting was revealed along with the company?s announcement of its first quarter results. ?The company will consider delisting Golden Ocean from the secondary listing on SGX. The volume of shares traded on SGX is very limited and the company would like to simplify its operation and reduce cost. The company?s presence in Asia on the shipping side is increasing and not affected by this delisting,? Golden Ocean said. The company is also listed on Norway?s Oslo stock exchange. On Friday, it announced a first quarter net profit of $10.26m, up from $6.82m in the same period of 2013. Revenue also improved 36.3% year-on-year to $74.2m. The company noted that in April, both spot and forward markets in the dry bulk sector have been under pressure, but most analysts remain confident that the fundamentals should cater for a market upswing within the next few months. Capesize vessels earned on average $16,300 per day during the first quarter with strong volatility ranging from $7,900 per day to $35,000 per day, while panamaxes earned on average $10,425 per day with less volatility. On the demand side, preliminary data is indicating an overall volume growth in seaborne dry bulk trade of 6% for the first three months of 2014 against a net fleet growth of about 5%, according to Golden Ocean. |
||||
| Useful To Me Not Useful To Me | |||||
|
|
|||||
|
Lucky03
Elite |
24-May-2014 18:25
|
||||
|
x 0
x 0 Alert Admin |
Tightening trans-Atlantic capacity could be a good sign for pricing for the carriers.
JOC ? Maritime News ? Container Lines ? G6 Alliance ?Severe? Trans-Atlantic Space Shortage Due to G6 Rollout Grace M. Lavigne, Associate Web Editor | May 01, 2014 9:59AM EDT A temporary space shortage on the trans-Atlantic is looming thanks to implementation of the G6 Alliance in that trade lane. Mitsui O.S.K. Lines and APL both recently told customers that they anticipate a shortage of space in their trans-Atlantic services in coming weeks as the G6 Alliance network is rolled out in that market. The G6 currently operates in the Asia-Europe and Asia-U.S. East Coast markets, but is being expanded into the trans-Pacific and trans-Atlantic following approval by the Federal Maritime Commission in April. From mid-May through mid-June there will be a ?severe reduction/shortage of space? in at least some of MOL?s North America-North Europe services because of implementation of new G6 services and vessels, an account representative said in an email last week to Richard A. Gareau, president of Midwest Transatlantic Lines. The G6 comprises APL, MOL, Hapag-Lloyd, Hyundai Merchant Marine, NYK Line and OOCL. MOL noted however that it has a ?protect list? for those four weeks, implying that at least some customers will not be affected. An MOL spokesperson told the JOC that it continues to accept bookings in the North America-Europe trade and has no plans to stop. ?Our focus in the trade is on transitioning to our new G6 services and continuing to offer our customers a reliable service,? the spokesperson said. APL said in a customer message on April 17 that there will be an ?interim reduction in capacity and port-pair coverage in the North America-to-North Europe direction? as its current trans-Atlantic services phase into the G6 Alliance network, lasting until the new services are fully deployed. An APL spokesperson said that ?capacity adjustments can be expected in any major service transition where vessels are being repositioned? although they ?strive to offer shippers the best possible services.? ?We are fully committed to satisfying our customers? needs when managing bookings acceptance, taking into account key commercial and operational considerations such as space availability and loadability,? the APL spokesperson said. A Hapag-Lloyd spokesperson told the JOC that its bookings will ?not be affected at all? and the G6 transition will work ?absolutely seamlessly and without any friction.? An OOCL spokesperson also told the JOC that the company is not expecting any significant service issues when the new G6 services are rolled out in May. HMM and NYK Line did not immediately respond to requests for comment. G6 Alliance services offered from North America to North Europe include the Atlantic Express 1, scheduled to begin on May 26 from New York the Atlantic Express 2, slated to start on June 3 from Houston and the Atlantic Express 3, as well as the PA1, which begins on June 1 from Oakland, Calif., and the PA2, first leaving from Balboa, Panama, on June 4, according to APL. The G6 Alliance aims to deploy a total of 240 container ships serving 66 ports in the Americas, Europe and Asia in the second quarter as it ramps up in response to the P3 Network comprising Maersk Line, CMA CGM and Mediterranean Shipping Company that is awaiting approval in China. The G6 lines will operate 42 ships in five trans-Atlantic services, including two pendulum services, calling at 25 ports in the U.S., Canada, Panama, Mexico, the Netherlands, the U.K., France, Belgium and Germany. A further 76 vessels will operate 12 trans-Pacific services, calling at 27 ports in Asia and on the U.S. West Coast. Tightening trans-Atlantic capacity could be a good sign for pricing for the carriers. Rates in the trans-Atlantic have been steadily dropping, hitting lows in the second half of 2013 and continuing into 2014. The CTS index of rates in the North America-Europe trade lane dropped to a reading of 89 in February, the lowest level since January 2010. World Container Index rates from New York to Rotterdam dropped 22.2 percent year-over-year in the week of April 24. Hanjin Shipping is scheduled to drop its trans-Atlantic service after May because of ?dismal market conditions which do not support operational costs.? Hanjin provides trans-Atlantic service on what it calls the New Trans-Atlantic service, the lone service on that trade operated by the CKYHE alliance, which also includes Cosco, ?K? Line, Yang Ming and Evergreen. The container line employed four ships on the service, including the 4,389-TEU Phoenix, although it is not yet known which of the remaining CKYHE partners will replace it, according to Alphaliner. Contact Grace M. Lavigne at [email protected] and follow her on Twitter: @Lavigne_JOC. |
||||
| Useful To Me Not Useful To Me | |||||
|
ascend88
Master |
24-May-2014 18:02
|
||||
|
x 0
x 0 Alert Admin |
Wise advise indeed ...
|
||||
| Useful To Me Not Useful To Me | |||||
|
lifeisgood
Supreme |
24-May-2014 17:00
|
||||
|
x 0
x 0 Alert Admin |
I am buying NOL, just like I have been buying Rotary. I believe 明 天 会 更 好 ! for these two. Share price cycles often mimic profit cycles, but frequently months or quarters ahead.
|
||||
| Useful To Me Not Useful To Me | |||||
|
jj7007
Veteran |
24-May-2014 14:11
|
||||
|
x 0
x 0 Alert Admin |
Guys, everyone is clearly divided over this counter. Those who are pessimistic are those who are arguing about the last 3 yrs. Well, I' m not buying it based on last 3 yrs, but the next 3 yrs. This is why I' m buying this compared to some other counters which had good results the last 3 yrs but may be coming to the end of their profit cycle. This negativity as I have said is public, what you guys are saying is general knowledge everyone knows, including the big instituitional players. Y then are they not selling or shorting this counter? Cuz imo, this is already priced in and the price movement or lack thereof explains it. 98c is a support and I' m sure we will see 1.10 being tested by year end. This counter has always been a slow mover and many times a laggard of the general market in the last 14 years. This is definitely not your exciting counters like noble olam, but is a steady climber as it has always been! So don' t come in here and complain " see it is lousy and not moving compared to Noble, genting, yzj...etc" , this is a steady stock which is why the old timers like to buy. Get that perspective right first before your shout their senseless expectations about this lousy counter. Definitely not a counter that one should monitor price every other hour everyday. |
||||
| Useful To Me Not Useful To Me | |||||
|
|
|||||
|
Lucky03
Elite |
24-May-2014 12:57
|
||||
|
x 0
x 0 Alert Admin |
I'm cautiously optimistic that it will recapture its $1 mark next week.
|
||||
| Useful To Me Not Useful To Me | |||||
|
spore1
Supreme |
24-May-2014 12:25
|
||||
|
x 0
x 0 Alert Admin |
Nol seems consolidating. May move up from current position. sporeshare.blog spot |
||||
| Useful To Me Not Useful To Me | |||||
|
Lucky03
Elite |
24-May-2014 12:03
|
||||
|
x 0
x 0 Alert Admin |
Thanks, hem2998 !
Drewy is generally quite negative in their assessments the container industry and the prospect of any significantly improvement in freight rate, if any. They have indeed turned quite positive on NOL's effort in cost reduction and highlighting the hidden gem of the APL terminal. Four scenarios that may prove positive for NOL if any materializes : 1. NOL cost reduction outweighs the lower freight rate or even higher sales will not help if NOL loses money for every sales. 2. Some major M&A with another shipping magnate to increase market share and reduce unit cost to improve competitiveness, as hinted by a group recently. 3. NOL divest its hidden gems - APL terminal and warehouses to improve cash flow, nurse the balance sheet to a much healthier gearing and reduce interest expenses and focus on port to port efficiency. 4. Temasek makes another attempt to privatize it which it failed to do so ten years ago in 2004 when it offered $2.80 per share only to double its stake from 30+% to current 67%.
|
||||
| Useful To Me Not Useful To Me | |||||
|
hem2998
Veteran |
24-May-2014 11:52
|
||||
|
x 0
x 0 Alert Admin |
hi lucky03, here is it. https://14c1ada0-a-62cb3a1a-s-sites.googlegroups.com/site/researchreport99/DRW_NOL05032014.pdf?attachauth=ANoY7coLixjSD9N6qFacHOEEKhp_ZzJ0jXPyy1iI1OX5fJmFfP56FmE91ZPD6pvFGydgZyKw0IralOPjQ5of0KDSxpu3GdNHoZJypUO9eSJsUhNAfRy3ZIu_5GGuLi5FOqrZQFS8xvh2pSFjPtU4MCysW-1YNnxQ_NbIJgG21iWEacpSw_ziUfqRBO43bSPSn0pK3pVYu8YcE2aTom2_bn0aztbWzqOhHkAcwYlWLrQpviwqfomnXEM%3D& attredirects=0
|
||||
| Useful To Me Not Useful To Me | |||||
|
Lucky03
Elite |
24-May-2014 11:45
|
||||
|
x 0
x 0 Alert Admin |
The report referred to the 'The upcoming Transpacific contracting...' which contrary to expectation of a rise should have been concluded with a drop of about 1-2% freight rate compared to 2013 ? Anyway, that has been more or less expected but there is some bright spot of the more responsive spot rate which has seen some healthy adjustment as the various alliances try to out their weight around improving for a more sustainable freight rate. The challenge remains with cost cutting.
Neptune Orient Lines Has Sunk By 55% In Three Years: Can It Ever Recover? By Stanley Lim, CFA - May 23, 2014 Neptune Orient Lines (SGX: N03) was once a proud representative of Singapore in the container shipping industry. Today, it?s a shadow of its former self, having suffered pre-tax losses for three consecutive years between 2011 and 2013. Its latest first quarter results for 2014 also showed no sign of any imminent turnaround with its quarterly losses coming in at US$97.9 million, a far cry from the quarterly profit of US$75.5 million it had earned a year ago. In a reflection of the sorry state of its business, shares of the shipping firm have sunk by 55% to S$0.98 since the start of 2011. By way of comparison, the Straits Times Index (SGX: ^STI) has actually inched up by 2.7% to 3,275 points in the same time frame. Neptune Orient Lines currently has two major business segments: Container Liners, and Logistics. The container liner business brings in much higher revenue between the two but unfortunately, is the more problematic one as well. What has happened in the shipping industry? The shipping industry has been in a slump for some years now. Prior to the Global Financial Crisis of 2008-09, many large liner companies had over extended themselves in the name of expansion and are now suffering many of those companies are facing bankruptcy with fleet rates remaining weak. Neptune Orient Lines, though not in a situation as dire as having to declare bankruptcy, is quite clearly not lying on a bed of roses either. Neptune Orient Lines? troubles To give an idea of the magnitude of the troubles facing the company, its container liner business had accumulated more than US$800 million in pre-tax losses between 2011 and 2013. And that?s piled on top of a huge debt load (at last count, the company?s total borrowings stood at US$4.7 billion in comparison, cash only amounted to US$605 million) and a weak macro environment for the shipping industry. In light of such figures, it?s perhaps fair to ask: Is Neptune Orient Lines facing a cyclical issue or is the company suffering from a structural problem with its business model. The distinction is important because the former would likely see the company?s business improve once the shipping cycle turns the latter however, might result in the company?s business never recovering. Neptune Orient Lines? response The company has always prided itself for being a high quality service provider for the shipping industry. However, in an environment where there?s fierce competition stemming from an oversupply of ships, it?s the customers that seem to have more bargaining power. In such a situation, being the lowest-cost service provider might be more important than aiming to deliver higher quality service. APL, the shipping and container liner arm of Neptune Orient Lines, realized this issue and had announced in January this year that it would be restructuring to ensure that it would be able to compete more effectively in this highly competitive, price-conscious environment. As part of the restructure, APL will be focusing more on cost management and market responsiveness in delivering its services to customers. The success or failure of APL?s restructuring bears watching from investors: If the company is not able to compete more effectively in this market environment, it might find itself facing even more pressure as its debts pile up. Elsewhere in Neptune Orient Lines, the company does have a high quality business in its logistics arm. Revenue at the segment has grown from US$1.26 billion in 2010 to US$1.59 billion in 2013 in comparison, revenue at the container liner arm has declined from US$8.29 billion to US$7.33 billion in the same period. Although the logistics business is still relatively small in terms of Neptune Orient Lines? total revenue, the profits it can generate helps provide much needed support in the company?s quest to turn its container liner business around. Foolish Summary Although Neptune Orient Lines can hardly be faulted for the stormy state of the shipping industry?s downturn, cost controls are still within its jurisdiction to a large extent. If it?s not able to control its costs and streamline its container liner business, it might just find itself having to answer to its creditors before the industry can turnaround.
|
||||
| Useful To Me Not Useful To Me | |||||
|
Lucky03
Elite |
24-May-2014 11:36
|
||||
|
x 0
x 0 Alert Admin |
hem2998, where is the report from and when was it published ? Before or after the Q1 report ? | ||||
| Useful To Me Not Useful To Me | |||||
|
pnuklis
Master |
24-May-2014 10:06
|
||||
|
x 0
x 0 Alert Admin |
NOL is a dead stock nio use in any analysis for the container industry |
||||
| Useful To Me Not Useful To Me | |||||
|
hem2998
Veteran |
24-May-2014 10:01
|
||||
|
x 0
x 0 Alert Admin |
FY13 concludes in loss, FY14 turnaround beckons In our last full year investment report on NOL we had expressed confidence of a potential breakeven or slight profitability for NOL in 2013. However, divergent to our expectations, NOL reported a marginal loss of USD 76m for the full year FY13, a third in a row. We have slightly adjusted our FY14 estimates but stick to our expectations for a 2014 turnaround. NOL?s third consecutive annual loss was triggered by weak freight rate market conditions especially at the start and the end of the year, coupled with still high fixed cost base. However, we believe that the company is now in a better position to return to profitability in FY14 driven by its core focus, the transpacific trade and, as its continued efforts to lowering its cost base bear fruit in coming quarters. We believe recovery phase for NOL set in during FY13 and recommend investors focus on the expected earnings turnaround in FY14. We expect both operating margins and return on equity to recover from historical lows in FY14 and continue on an upward trend in FY15. Cost optimization to see margin improvements NOL continues to cut its costs significantly and plans to move ahead in this direction in the coming years. Post its 4Q13 results, Group Deputy President and CFO, hinted that he would be severely disappointed if they do not save significantly much more in coming quarters. He also underscored that NOL?s cost optimization efforts will continue beyond 2014 and the company may look forward to returning more expensive charters in the future as well. NOL initiated a major cost savings program early FY12 which we view as a necessary step in the right direction as its fixed cost base still remains relatively higher than its peers. We strongly believe that turnaround for the company is a function of lowering its high fixed unit costs as a sustained recovery in freight rates is still a few quarters away. NOL?s asset base has historically been focused on charter-in tonnage leading to higher unit costs. However, NOL?s current focus is on fleet restructuring where it will expand its owned fleet and points towards increasing asset-intensity driving long-term returns. NOL took delivery of 14 new build vessels in FY13 and will complete its fleet restructuring program this year. Going by the cost savings that will accrue consequent to fleet renewal program and taking into account new developments on alliance front, we find that NOL might actually achieve much needed margin improvement in 2014 buoyed by its cost saving efforts and any modest market recovery. Focus on Transpacific trade, lower risk from Asia-Europe NOL?s key trade exposure to the Transpacific trade, wherefrom it derives close to 50% of its liner revenue, will help the company mitigate depressed freight rates on Asia-Europe trade, in our view. US economic data continues to surprise positively, raising market optimism on trade recovery. The upcoming Transpacific contracting is a key event for both freight and volume development and will in all earnest decide the company?s financial performance in FY14. TSA, the Transpacific stabilization agreement, of which NOL is a member has recommended a voluntary guidance of USD 300/feu increase over current cycle rates. If the carrier is able to achieve a share of the proposed increase, this would significantly improve its revenues as NOL derives close to ~70% of business on Transpacific by way of annual contracts. Nevertheless, a sizable revenue and volume exposure towards Transpacific will help company to protect its revenues and thus be shielded from the heightened volatility that plagues Asia-Europe trade. NOL's share price movement Balance sheet strained on capex commitments amid weak operating cash flows NOL took delivery of 14 new build vessels in 2013 making final payments on them and disbursing in part its capex commitments. It will take delivery of 10 new build next year and will make payments in view of that. Owing to this massive fleet renewal program and weak operating cash flows, NOL?s net gearing ratio surged to 182% at the end of 4Q13 from 136% at the start of the year. Even as we do find NOL?s balance sheet severely strained owing to mounting debt and are concerned given the unstable economic environment, we do not see any near term liquidity or solvency concerns. NOL reported USD 981m cash on its 4Q13 balance sheet greater than 10% of its sales. Further, we expect that improvement in operating cash flows in 2014/15 and a transitory pause in expansionary measures will have a positive impact on net gearing and bring it meaningfully down to less than 150% by end 2015. APL Terminals - A Hidden gem NOL?s APL Terminals division performance is not reported separately and is clubbed under ?Liners? in the financial statements. However, APL Terminals is a major source of income and value to the group. We argue that APL Terminal remains a hidden gem in NOL?s asset portfolio and an opportune divestment of terminal assets even while retaining control will potentially unlock and add tremendous value for shareholders. Drewry estimates APL Terminals generated 7% of total revenues for NOL in 2013 and accounts for 23% of NOL?s fair value. It also appears underreported by its global role. APL Terminals stood 15th in the list of global terminal operators handling a total throughput of 6.1m teus in 2012. We accord a fair value in our base case for APL Terminals of USD 600m with our high case valuation reaching as much as USD 800m. Recent deals in the global ports landscape have seen major container carriers like MSC and CMA CGM paring their stake down at decent valuations. We would not be surprised if NOL were to divest a part stake in APL Terminals while retaining majority control. Intra Day Gadgets powered by Google Technical Analysis Daily Chart Value and Risk - Attractive valuations amid expected turnaround this year We had upgraded NOL to Attractive with a price target of SGD 1.26 in our November 2013 report. Post the FY13 results and estimate changes in our model and reflecting confidence in NOL?s cost saving program, we marginally increase our fair value estimate to SGD 1.28 per share. NOL is currently trading at SGD 0.99 and a one year forward P/B of 0.84. Our FV is based on the last 5 year average P/B multiple of 1.13x times the estimated book value for 2014e, as we expect ROE to turn positive in FY14 with profitability restored. We think the market is waiting to assign a premium multiple to NOL until sustained profitability emerges and we concur with this view. We take the view that worst for NOL is over and NOL will return to profit in 2014. In our opinion, NOL?s quarterly operating income is expected to increase going forward and its earnings should turn around by 1H14. NOL?s share price has declined ~14% YTD amid declining freight rates and now presents a good opportunity both as an investing and a trading play ahead of the 2014 turnaround. NOL scores a Green light and a Red light on Drewry?s bespoke value and risk ranking respectively, indicating an Attractive valuation and a High risk | ||||
| Useful To Me Not Useful To Me | |||||