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Second quarter spur
Western Bulk has delivered a double helping of positive news that bodes well for its second quarter performance.
Oslo-listed Western Bulk says it will record a $12m gain in the second quarter after selling its charter default claim against Pan Ocean.
With the company also revealing a May margin of $1,333 per day, above the $852 daily seen in the first quarter, its shares gained ground.
Western Bulk stock climbed by more than 3% to NOK 11.35 ($1.14) each this morning after the twin statements.
This compares with the 0.06% rise in the Oslo Shipping Index of Oslo Bors and Oslo Axess-quoted companies.
Western Bulk saw two supramax charters fail after the collapse of STX Pan Ocean, which was later renamed Pan Ocean. Its initial claim against the South Korean company sat at $31.8m.
Jonas Advocaat Kraft, an analyst at Pareto Securities, says the additional cash will add to the company’s dividend, where it has a policy of paying out between 75% and 100% of adjusted net profit.
“Despite a discount to the initial claim of $31.8m, we find today’s sale is positive rather than shares and tail-end cash payments over 10 years,” the analyst said.
Western Bulk is not the only owner to have sold its claim against Pan Ocean.
In April J Lauritzen collected $30m from the disposal of the claim involving the failure of two capesize contracts, which originally ran to $100m and on which it took a $77m writedown last year.
Kraft says Western Bulk’s performance in May was good, but its June figures will likely be poor.
“The world’s third largest supramax operator has reaped from its option days the past two months and also the base margin has been good,” he explained.
“However, the last month of Q2 is likely to be very poor. Still, we do not change our $1,100 per day margin estimate for Q2.”