There is still no clear sign of rebound of shipping market. Q4 result maybe will out next week? can expect positive net profit this quarter as all the indexes (BDI, Panamex & Handysize) during Q4 still above profitable level. maybe can expect 20mils net profit. But the Q1 of 2022 will be challenging. if remain current level or lower it may report net loss.
Since this company now became a cash rich company after sold the 2 ships, see what is the management planning for the cash. capital return or buy a new ship (possible Capasize as it may be cheap now)?
Many thanks for the explanation. but this seem doesn't apply to PRTasco Non-controlling Interest. The Non-controlling interest not only share the profit, but they do have guaranteed return, their return will not lower than RM3,000,000 per quarter. Like happened in 2020 Mar & 2020 Jun, the Net profit before tax is not enough to pay the guaranteed return to Non-controlling interest, the owner was force to record in loss in order to pay the guaranteed return, even the Net profit before tax on that quarter was report positive.... the worst happened on 2020 Dec, the company report Net lost but still pay to these non-controlling interest..... 2020 Sep the pay to non controlling interest had increased to RM7,738,000!
sold ship at uptrend and buy back during downtrend is a good strategy. this will generate more cash during the ship trading as the ship price during uptrend and downtrend are significant difference. this is how Maybulk did during last super high BDI 10+ years back.
The increase in both revenue and gross profit are below my expectation.
Based on the average BDI on Jun 2021 & Sep 2021, i though should be 30% increased in revenue and 50% increased in gross profit compared to previous quarter, but end up revenue only 10% increased, and gross profit only less than 20% increase. not satisfied but at least have improvement. this maybe causing by selling the 2 ship reduce the earning capability, or my average BDI should cut off half month earlier as the last half month high BDI will not contribute to the respective quarter.
The significant increase in the net profit contributed by the earning of disposing 2 ships, which bring in 91 million! i thing these 2 ships still have installment on them thus after selling the ships the borrowing also drop significantly, long + short borrowing now is RM67,486,000, compare to last quarter RM188,022,000. Finally Maybulk cash is higher than its borrowing afer so many years, with more than 100 million cash on hand, i hope Maybulk can announce capital return.
praise to the Maybulk management to make decision to sell the ship when BDI upward. based on current BDI downward, i have to said this is a brilliant and forecasting decision. This is not an easy decision to make to sell the earning machine when market going upward.
Sep 2021 estimated profit should be around 45 millions, this almost can clear 60% of its short term borrowing. the liquidized cash 200 millions from the selling of 2 ships, after minus the long term borrowing, still have 80 millions. Let see how Maybulk will manage this remaining cash. use it to settle all borrowing? or capital return? I hope it will announced capital return.
the Dec 2021 quarter will be a critical period for Maybulk. Even though the BDI recorded 10 years new high during the beginning of this quarter, the BDI is then continuous dropping from 7 Oct 2021. as long as the average BDI in this quarter remain higher than 2000 Maybulk will still making profit, but if average of BDI is below 3800 then the result will not be as good as in Sep 2021. Hope the coming few months can at least hold at 2700 - 3000....
One of the major cause of BDI dropping is the power shortage in China. this actually is a cycle, this high demand in power causing high demand in LPG & coal, and high demand in LPG & coal causing shipping rate increase, high shipping rate increase the LPG & coal cost in China causing the electricity supplier in China lost money for every single power they generated...... Now just wait China to settle this issue, mostly China will increase the charge of electricity, especially for industry. Since this will affect many others sector, so it will take time to come out a proper planning. So the time to settle this issue is unpredictable ......
sapurakencana now also have Beijing Winter Olympics 2022, and now both China and U.S are prepare for worst, that's why all steel, oil & coal goes up, because they are main things required during war .....
hmmm, the decision liquidate 2 ships may be a brilliant decision if the BDI rebound is going to hold less than 6 months, but it will be a bad decision if BDI going to hold above 3500 for long as it will reduce the earning capability. NTA reduce will also affect the value of Maybulk.
The same liquidation also happened 2019 & 2020, but i feel like it was a forced decision by the high borrowing.....
For those who in doubts why Maybulk still remain in low price while BDI already fly high to above 4 thousands, the reason is Maybulk is still in high accumulated losses due to the long period of long BDI, and the high borrowings. Till Jun 2021, the accumulated losses is RM136,800,000 and total borrowings are RM188,022,000.
from the records, both losses and borrowings are reduced steadily around RM30,000,000 each quarter. For Maybulk to break even, it will need to take around 9 months profitable period with current BDI. The share price remain low as it is hard to predict whether the current BDI can hold more than a year or not.
to buy or not to buy Maybulk, you need to come out your own forecast on BDI: can BDI hold above 3500 more than a year from now? if your answer is yes, then buy it. if the answer is no, then current high BDI will only help Maybulk reduce the losses and borrowing, but the balance sheet still not so attractive. Estimate all the big funds may start to buy in if next 2 quarter remain in good result. As small fish, we need to buy in earlier then those big fund in order to gain satisfying profit.
Compare from Mar 2019 till Jun 2021, the total properties (excluded right of use assets) is reduce RM397,129,000, and the total possible cash is also reduce RM253,821,000. Total liabilities is reduce RM474,259,000 (RM771,027,000 - RM296,768,000) Accumulated losses also reduce RM29,949,000. From above actually can tell Maybulk top priority is to settle all the borrowing or payable. The total borrowing is reduce quit a lot, which is good sign, but it was achieved mostly by selling their properties.
the reduce in asset also affect the earning capability of Maybulk. Example, when the property was RM830,344,00 at Jun 2019, the revenue generated is RM68,747,000 when average BDI at that quarter is only 995; compare to Dec 2020, when property was RM467,286,000 (almost same as current), the revenue generated was RM41,993,000 with average BDI 1365, which higher than Jun 2019.
With current properties, Maybulk will start making profit when average BDI of quarter is above 1700. for the quarter of Sep 2021, average BDI of this quarter could be higher than 3600, expected profit could be double of Jun 2021 if BDI remain above 3500.
With current earning capability, it will still take long time for Maybulk to bring its total liabilities (majority is the borrowing) to a healthy level, at least 1 and half year with current profit. So I think Maybulk will not announce any dividend in this period even the profit improve a lot due to high BDI.
I hope Maybulk had predict this rebound of BDI had had purchased new ships to increase Maybulk earning capability. Anyone please update me if you have any news.
hmm, my point of view. since MBC borrowing still high 188 millions, and no one can tell how long this high BDI can withstand, i will wait till the borrowing go down to below 100 million then only consider to buy, safer.
from the June 2021, the debts repayment of MBC is high, so i think the time it borrowing reduced to below 100 million maybe will be within this year.
RussianRoulette the RM712 million is not debts, it is total liabilities. i believe you should understand the difference between these 2. Normally people won't compare the total liabilities to the cash on hand, but only the total borrowing to the cash on hand. if you compare the previous record, the total borrowing is 379 million (short & long tern borrowing + bank overdraft), while the available cash is 180 million (Cash balance, deposite and short term investment).
the debts ratio is a bit high, but not as bad as mentioned in the page you shared, and this is not the highest ratio in the company record, the worst year is 2016. i will only said this is tough year for this company but not the worst year.
i am not worry on this company debts, but i think the most challenging for this company is the operating cash.