SHIPPING RECOVERY

Mercator Lines will be reporting its 4Q results on 12 May. It has yet to make a single quarterly loss since it IPO\'ed in 2007. This is pretty remarkable considering how badly affected the shipping industry is. I like its business model of securing 70% of its revenue to fixed long term charter unlike Courage Marine 100% spot rate play. I expect a soft Q4 results due to the following reasons - a) No contribution from the contract that expired in Nov. Its rates was 44K/day. b) The 2nd post-panamax vessel is most likely plying spot rate route which may not be sufficient in covering its time charter rates of 26.5K/day. It will only commence its 1 year charter contract in May @ 27K/day. c) The newly acquired vessel was delivered in May,. d) The 2 recent contract wins only started contributing in April. Q1 11 will be stronger. Wonder whether will they give any dividends.

I would look at a company\'s balance sheet too, not just the income statement. Courage Marine is in a nett cash position, having kept its balance sheet debt free. Long term charters might not mean anything. Look at FSL Trust\'s recent experience. Courage Marine derives 70% of its revenue from spot voyage contracts. With the BDI recovery in place, Courage Marine is most likely to be a strong beneficiary.

I am fortunate to have an expert on Dry Bulk Carriers as a regular reader of my blog and I have just posted his comments: singaporeanstocksinvestor.blogspot.com/2...son-shares-more.html

dear AK71, grandmaster89 and all forumers: thank you for your valuable insights and for visiting. u may wish to know more about Courage Marine by visiting: a) Our Apr 28 story COURAGE MARINE: Picking up steam on economic rebound features. www.nextinsight.biz/content/view/2363/79/ It features a Q&A with the chairman & the CFO b) 2 Mar story COURAGE MARINE: Profit rebound in Q4, surprising 3.7% dividend yield www.nextinsight.biz/content/view/2132/79/ It has details of the Q4 rebound and some background on the company. :)

Baltic Dry Index is 3,707. Up and away....

Courage Marine prob will report Q1 results this week (same as Mercator). Let\'s see if the rebound in Q4 has countinued. Currently tThe Q2 performance should be even better as the Baltic Dry Index has hit 3.7K.