Yesterday, after market, CMB reported 4Q11/preliminary FY11 results. CMB reported revenues for the quarter of € 86.4m. EBITDA, EBIT and result before taxes are reported at € 41.1m, € 21.8m and € 28.7m, in-line with our forecast for € 41.2m, € 22.8m and € 28.3m. The result after taxes amounted to € 30.6m, exceeding expectations (€ 25.9m) due to the recalculation of deferred taxes at both ASL Aviation and Bocimar Luxembourg. The financial result for the quarter was impacted positively by exchange rate differences on the Group’s cash US$ position of about € 9.9m. Contribution of Bocimar, ASL Aviation and the other activities to the net result for the quarter was € 17.1m, € 4.3m and € 9.2m.
For the full year, CMB reported revenues, EBITDA, EBIT and a net result of € 468.1m, € 160.6m, € 89.6m and € 96.3m. Results are impacted by a € 9.6m capital gain on the sale of FMG shares, a € 0.9m capital gain on the sale in 2011 of 105k Clarkson shares, a positive impact from exchange differences on the Group’s cash US$ position of € 6.5m and € 4.2m loss realised on the sale of Hessenatie Logistics.
Spot Capesize earnings averaged last year $ 14,433/day, down from $ 30,587/day in 2010. Following an extremely weak first half, with rates even not covering operating expenses, the dry bulk market has firmed significantly during the second half. However, rates have plunged in the early days of 2012 from levels over $ 30k/day end-of-December to below $ 10k/day currently. Rates are impacted by adverse weather conditions in both Brazil and Australia leading to cargo supply disruptions and temporary closure of a number of major ports. CMB expects the markets to return to normal as soon as exports reach their usual levels again.
In December, CMB announced to have reached an agreement for the termination of Bocimar’s counterparty insurance. Within the framework of this agreement, Bocimar has received an indemnity of $ 120m. This amountwill be accounted for in the results over the remaining period of the previously insured contracts (for 2012, 2013 and 2014 the respective amounts are $ 39.4m, $ 32.9m and $ 6.9m). Bocimar will continue to benefit from a solid fleet cover with a coverage ratio for its Capesize fleet of respectively 68%, 54% and 45% in 2012, 2013 and 2014. Coverage ratio’s for the Handysize fleet are lower but CMB remains convinced about the Handysize market’s solid prospects, which are seen as less prone to volatility.
CMB has recently reduced its participation in Clarkson by 720k shares to 2,519,650 currently (13.27% interest). The capital gain of $ 8.9m will be accounted for in 1H12.
Conclusion:
On an underlying basis, results are perfectly in-line with expectations. Atcurrent exchange rates, CMB’s NAV is estimated at approximately € 20.7 per share. The financial participations in FMG and Clarkson account for approximately € 5.2 per share (a bit up on recent strength in the FMG shares). Rating and target price confirmed.