NMM CEO Angeliki Frangou chose Valentine’s Day to announce Q4 2024 results. Just pointing it out, I think that has funny implications.
- Rev $332.5M
- EBITDA $197.6M
- Net Income $94.7M
- 5c/sh dividend (again!)
- A pair of vessel sales, and delivery of four vessels
Awrighty! The usual exercise of dissecting thru NMM/Angeliki Frangou spin. My big gripe is how she counts newbuild vessels in her stats (Slide 6 is the prime example). That one spin point ripples down the rest of the stats on the slide. Is NMM worth $143.2/sh? (Slide 7, 9) IMHO, at this time, … Not. Without a deeper dig, I might say – $90 - $100/sh.
While not an immediate concern, the “barbell” graphic (Slide 11) is somewhat interesting. It says a lot, especially if one factors in $1955M of container rev, and $1411M of tanker rev. The latter has additional upside given some of the 18 newbuilds are likely not contracted currently.
Yes, NMM is undervalued. But, I would need to dig deeper before I touch this shipping name.
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Went and poked around at the NMM website.
- Although only four of the 16 LR2/Aframax vessels have delivered, all 16 of the vessels have charters. Rates do vary some, but all of the vessels have charters, each a 5-year charter upon delivery. That translates to about $750M - $800M of tanker backlog (over half the existing tanker backlog)
- NMM has opted for a lot of Sales & Leaseback financing. I do know the S&LB financing was in place for the 4 newest VLCCs and a lot of the Panamax size container vessels. What did surprise me was the number of Cape dry bulk vessels that also have Sale & Leaseback financing (Counted 65 vessels and expect additional LR2/Aframax newbuilds might opt for similar financing)
- Opting for the Sales and Leaseback financing is not a bad thing. It just depends on the terms. For NMM, the S&LB financing on the older Panamax container vessels had really nice terms.
- I can’t speak for the S&LB financing on the newer vessels. But so far, NMM have opted for S&LB financing for all their newer delivered tanker vessels, and the MR2 newbuilds.
- Roll-off of four very low-ball Panamax dry bulk charters. Plus, one of the vessels is scheduled for sale.
Again, added data from NMM, that isn’t as obvious to know, from their presentation material.