Eagle Bulk Shipping has fallen short of analyst consensus for the fourth quarter, primarily due to offhire days incurred during its scrubber retrofit programme.
The Gary Vogel-led supramax/ultramax specialist posted an $11.2m net loss for the last three months of 2019 versus a $6.49m profit for the same period last year.
Those results translated into a $0.16 loss per share for the quarter, missing estimates by $0.12 and contrasting $0.09 earnings per share a year earlier.
The offhire days, which led to 4,358 available days versus 5,077 a year ago, also caused revenue to fall to $71.5m from $86.7m.
“With the onset of IMO2020, the fourth quarter proved to be a dynamic period for the shipping markets and one of major transition for Eagle", chief executive Vogel said in a statement.
"While our financial results in Q4 were impacted by increased offhire days due to our scrubber installations, I’m pleased to report that our program is now substantially complete with 38 ships commissioned."
He said his New York-listed company should have a "competitive advantage" with only 7% of the supramax/ultramax segment having scrubber-fitted ships.
"Two months into the new year, notwithstanding a challenging environment, we have thus far achieved a strong market outperformance, with our scrubber vessels contributing significantly", he said.
Eagle Bulk has attained a time charter equivalent rate of $10,300 per day with about 85% of the first quarter's available days fixed thus far.
Arctic Securities expects Eagle to deliver an Ebitda of $15m for the first quarter, assuming current spot rates on the remaining days. This is 10% of Ebitda consensus of $13.6m for the quarter.
Still, Eagle Bulk's results "fell on the soft side of estimates" due to lower than expected revenue amid depressed rates and more offhire days for scrubber retrofits, analyst Jo Ringheim said.
"Dry bulk rates have been hovering at depressed levels since yearend, and we look forward to management’s view on the current market balance and near-term outlook," he wrote Wednesday in a note to clients.
Rates improving
Fearnley Securities also said Ebitda of $10m and negative earnings per share of 15 cents were below its estimates and the industry consensus.
The first quarter forward fixture rate of $10,300 compares to $11,300 in the fourth quarter.
"We expect limited revisions to our first quarter estimates, foreseeing $8m of Ebitda," analysts Espen Landmark Fjermestad, Peder Nicolai Jarlsby and Ulrik Mannhart said.
"Per 2019, Eagle holds cash of $59m plus an additional $55m in undrawn revolving credit facilities."
They added that recently, both supramax and panamax rates had shown improvements, driven by "strong demand...with grain moving eastbound."
Modern ultramaxes are now making as much as $14,000 to $15,000 per day on transatlantic trips, while Pacific routes have increased by $2,000 per day.
The company plans to hold a conference call with analysts Thursday morning to discuss fourth-quarter results.
