Scorpio Bulkers is expected to come in “significantly below” consenses estimes when it reports fourth quarter results on Monday.
“We forecast TCE revenue of $56.7m in the fourth quarter of 2019, below consensus at $62.4m,” said Cleaves Securities head of research Joakim Hannisdahl.
“Against an expected low fleet utilization of 89% due to scrubber installations, we forecast average gross realized TCE across the fleet at $10,617 per day (p/d).”
Scorpio Bulkers’s guidance in late October was that 50% of fourth quarter 2019 kamsarmax days had been fixed at $14,083 p/d and 39% of ultramax days were fixed at $13,450 p/d.
“After the guidance, spot rates fell considerably, and we believe this is not fully reflected in current consensus estimates,” said Hannisdahl.
“Additionally, we are slightly higher on costs, which leads us to forecast an earnings per share of negative 11 US cents versus consensus at 2 US cents.
“We are also significantly below consensus on first quarter 2020 earnings estimates, which indicates that guidance on Monday could disappoint as well.”
Hannisdahl said an offsetting factor could be another special dividend of shares in Scorpio Tankers, which he described as “the company’s greatest asset at present”.
“The company owns 4.4 million shares in Scorpio Tankers, which valued at $162m constitutes 37% of Scorpio Bulker’s NAV.
“Over the past year, we have a 51% return on our recommendations on Scorpio Bulker versus an unchanged share price.”
Hannisdahl expects dry cargo earnings and asset prices to “stay depressed in the coming months” as the sector faces its the largest fleet growth in the first half of the year since 2016, against a "weak demand growth outlook".
