Member Info for Mike1959

Ha ha

Red or white?

Who needs a reason!

....BHSI up 2.54% today to 444 so surely we will have 446+ tomorrow.

Sam, spot on. The BHSI was 446 at the end of the last Quarter (June) so if the 2%+ daily increases of the last 4 days continue then we will be back there by the end of the week.

China seems to be a two edged sword at the moment, their economy is lethargic which increases the possibility of further fiscal stimulus, medium term interest rate was reduced yesterday by 0.15%.

TMIP did go ex-dividend today.

... fingers crossed.

today 25,900 sold and 158,245 bought but the share price is showing down 2.92%????

BHSI up a whopping 2.04% today, that is the biggest daily increase since March.

BHSI up again today, that is the first two daily consecutive increases since April

Chrome price up last week by$3/tonne to $286-290/tonne with chrome ore stocks at Chinese ports at 2.01 m on 4th Aug , down 78,000 tonnes from the week before.

I expect another price increase on Friday.

...just bought a few more.

The BHSI was actually up yesterday so i how we have turned the corner.

I know what you mean about the Simply Wall St article, it might have been mathematically correct but the absence of any context was shocking, any knowledge of the shipping sector explains the information although it might not change it.

I think the BHSI is becoming a big proxy for the state of the Chinese economy andIi am amazed that the BHSI is now below the early Covid levels of the first half of 2020..

Hope your jury service is going well!

....also there was the Simply Wall Street article on TMIP yesterday which was negative on the dividend due to the drop in earnings over the last 12 months.b

I think the selling is just a reflection that the Chinese economy is still subdued which will delay an improvement in the BHSI longer than we had hoped for , now looks like Q4 rather than August/September?

For those interested in further benchmarking have a look at the latest results out last week for Eagle Bulk Shipping Inc. The business was started in 2005 and is listed on the NYSE. It is possibly the biggest global owner of Supramax and Ultramax vessels with 52 , average age 10.0 years, they were one of the companies bidding for Grindrod last year. They have had an interesting year of shareholder upheaval and currently in a period of buying back some of their own shares.

Their net income for Jan- June 23 was $21m but their NAV dropped a massive 25.7%, from $819m to $609m (in the same period the TMIP NAV dropped only 6.4% , from $552m to $516m. Also the Eagle Bulk market capitalisation is around the same as the June NAV while the current TMIP market capitalisation is around 40% lower than the June NAV. And TMIP pays out a bigger dividend.

I know which one I would rather have!

Krusty et al, good that we can all chip in with information and views!

On your 4 points- dividend is maintained at the moment, but 2 cents every quarter is costing TMIP. $6.6 m every 3 months and with gross operating profit below this figure in Q1 and very likely the current quarter then the dividend cover is gone unless vessel values increase or the dividend is paid for out of vessel disposals. So we really need that expected upturn in the market.

Regarding disposals as you point out it is a balance and I agree that TMIP needs to get the debt down a bit more. The vessel disposals tend to be the older and Chinese vessels. It also depends on where you think we are in the vessel cycle, better to sell vessels now if they are barely profitable and you think the value could be lower in 12 months and vice versa, in contrast Pacific Basin have been buying vessels but they have considerably less debt and a chunk of cash in the bank.

I agree with what you say about TMI/Grindrod going forward, cost savings are being made and from a debt point of view i suppose TMIP does not want to buy the remaining 17% of Grindrod but I would think that it is worth buying up Grindrod shares on offer on Nasdaq/JSE at around $9-10 each. As you say, we will hopefully find out later this year.

The old Pacific Basin was co-founded by Christopher Buttery in 1987 before re-establishing the current Pacific Basin in 1998, taking it public and 2004 and eventually leaving at deputy chairman in 2007. Just one year out of university, Ed Buttery worked at Pacific Basin as chartering manager before moving on to bigger things. So the family philosophy while at Pacific Basin will be a template for TMI and no doubt in 20 years time Ed will want the business to b as big as Pacific Basin.

I suppose it is reassuring that the views of both businesses are similar but obviously they are using the same trusted recipe !

For anyone interested in doing some benchmarking the H1/2023 accounts for Pacific Basin Shipping Ltd are out on their website. I make their share price at an 8% discount to NAV.

Hi Sam, yes, the dividend at 2 cents/quarter or 8 cents/year currently works out at about 8.2% dividend yield at a share price of 76p. But I would still urge some caution for the time being. In the FY 2022 numbers the gross operating profit was $111.91 m , for April-June this has dropped to around $5 m and for the current Quarter, if the BHSI does not recover, it is likely to be around zero to $3m so the forward dividend cover is certainly under pressure unless things improve. The end of June total NAV of $516m was down $50m over the 3 months, almost entirely due to the bigger reduction in vessel values. So we are extremely reliant on vessel values holding up.

As you point out the bigger BDI is doing relatively better than the BHSI which is a good sign for the BHSI but it is all about timing. In the Q1/23 trading update TMI expects "improved rates in latter part of 2023" but I think we might be a month or two away from the start of this turn-round. In the meantime if the BHSI does not go positive, I see the share price tipping under 70p. So I would suggest holding fire for the next few weeks/months until the BHSI has turned and then top up, The 2024 handy vessel demand -supply fundamentals looks absolutely superb and if correct I expect a doubling/tripling in the BHSI between now and the end of 2024. DYOR

Having looked in more detail at the August Grindrod EGM, I realise that I have got it totally wrong. I originally thought it was designed to buy out the 17% minority shareholders. But now I see it is a suggested cash distribution of up to $45m, funded by recent vessel sales, to ALL shareholders and with 19.47 m shares that is where your $2.3/share comes from. Surely this is just a formality and as the majority shareholder with 83.23% of the shares then TMI will get $37m and use it to pay down the debt.

Sam/all, i was very happy with the FY accounts , which as most people have commented ticked all of the boxes on TC's significantly higher than the index, reducing debt, maintaining dividend, divi cover , integrating Grindrod etc. Given the difficult year it was pleasing to see NAV/share down only 1.6% over the period. In particular I liked that the 86% fair value in Grindrod was based on actual vessel values and operating performance rather than the Grindrod share price or what TMI had actually paid for the Grindrod shares,, that way we are comparing apples with apples and shows that the share price at a 34.7% discount to NAV is real.

While the BHSI continued to fall in April-June and TC's continuing to remain profitable i had hoped for a tiny improvement in the NAV/share but it looks like vessel values dipped about 6% in the Quarter when we might have expected about 1% natural depreciation with vessels 3 months older. Sadly the NAV/share at 31st June of $1.56 was down a big 8.8% on the Quarter although it still represents a 38% discount to the share price at the time. Since then the BHSI has continued to fall and today at 396 is the lowest since June 2020. Unfortunately if this does not turn round in the next few weeks we can expect a further reduction in NAV/share and possibly share price in the current Quarter.. In the Quarterly report the Company has once again ticked all of the boxes , and with interest rates currently above 6% have already agree one vessel sale and probably need one more big vessel sale or 2 smaller/older vessel sales to get the debt ratio below 25% which sounds logical given the current low profitability (particularly if you think TMI is going to offer to buy the remaining 14% Grindrod shares at the current market price plus $2.30 which would still be a discount to NAV, is this why TMI is strangely selling 2 vessels to Grindrod?).

As I have said before, TMI operates in a highly cyclical industry and shareholders have to realise this. TMI is doing all of the right things but cannot buck the market in the long term. But once the market turns we could see a significant jump in the share price nearer the NAV/share.

Sam, interesting!, Thanks for the info, i usually look at the Nasdaq Grindrod press releases but it is not on there. but looking at the JSE Grindrod Shipping SENS it is on there. I suppose the $2.3/share is from your "contract" only which sounds an enticing carrot with the current share price around $9 but II suppose the devil is in the detail. The options for the minor shareholders with less than 17% of the total company are rather limited ,the dividend has not increased in 3 years and the share price is considerably lower than the $21+5 that they could have had in December.

Sam, Grindrod paid $0.03/share dividend on 19th June in respect of Jan- March Quarter results released on 17th May (see Nasdaq Grindrod-press releases). Grindrod made a loss of $4.3 m in Jan-March or $0.22/share.

Also have a look on Seeking Alpha on their Grindrod article on 5th July.

...thar was changed at CD the last minute but I suppose better being slightly delayed rather than wrong or something missing!