New York-listed midsized tonnage specialist Eagle Bulk Shipping fell to its first quarterly loss since the Covid 19-ravaged 2020 market.
The Stamford, Connnecticut-based company is guiding to time charter equivalent bookings of $15,655 per day with 68% of days fixed in the current quarter, up about 36% from the $11,482 average from July through September.
Even the lower third-quarter figure represented about a 14% premium over the Baltic Supramax Index, the company said in its third-quarter earnings report after the market closed on Thursday in New York.
“Although our financial results for the third quarter are reflective of the headwinds faced by the broader industry, we were able to once again outperform the BSI,” which averaged only $10,000 per day, Vogel said in the report.
Freight rates bottomed during the quarter and were helped by a strong rally in September, with the BSI hitting almost $15,000 per day.
“The Atlantic market was the main driver for this recovery in rates, catalyzed by robust exports of soybeans and corn out of Brazil following the season’s record crop.”
Eagle Bulk reported a net loss of $5.2m, or $0.55 per share, against analyst expectations of a loss of $0.87 per share. However, the comparison may be skewed by the results of a vessel sale.
Adjusted for the impact of derivatives, Eagle Bulk reported a loss of $2.9m, or $0.31 per share.
However, neither figure is adjusted for gains on vessel sales, and Eagle Bulk recorded a $4.9m gain as the previously reported sale of the 58,000-dwt Sankaty Eagle (built 2011) was closed.
The gain added about $0.52 per share to Eagle Bulk’s bottom line, suggesting a loss beyond analyst estimates.
Eagle Bulk has a policy of paying a dividend equal to 30% of net income. But with no net income to report, it reverted to a minimum payment of $0.10 per share.
Ebitda for the quarter was $15.6m, easily topping the analyst consensus of $10.89m. Gross revenue was $82.6m, with TCE revenue of $54m.
Eagle Bulk had reported net income for the third quarter of 2022 of $74.3m, or $5.42 per share, on revenue of $185.3m.
The company’s last loss came in the third quarter of 2020, when it bled $11.2m or $1.09 per share.
Vogel noted that along with the TCE guidance given by Eagle Bulk for the current quarter, the BSI also had firmed to about $13,700 quarter to date.
Eagle Bulk’s financial breakeven in the quarter past was about $12,000 per vessel per day.
Eagle Bulk saw vessel operating expenses decline for the third consecutive quarter, falling 7% to $5,994 per day.
“We remain positive about the medium-term prospects for the dry bulk industry, particularly given strong supply-side fundamentals, macroeconomic risks notwithstanding,” Vogel said.
Eagle Bulk owns a fleet of 52 supramaxes and ultramaxes, 50 of which are equipped with exhaust gas scrubbers.
The company has total liquidity of about $170m.
