Strong chemical tanker performance
Berlian Laju Tankers (BLT) reported Q3’09 EBITDA just slightly below our estimates. While peers have reported double digit declines in chemical tanker earnings q/q, BLT’s rates were only down 3% likely due to its robust operation and limited dependence on the product tanker market.
Net revenues were USD 99m just as we had estimated in our Shipping Quarterly. EBITDA came in at USD 48m vs. our USD 51m. Deviation due to USD 3m higher costs evenly distributed on charter hire and G&A. Vessel opex remained unchanged at a low $4,100/day on average.
We calculate that time-charter equivalent earnings were down only 3% on average compared to Q2. This is much better performance than peers which have reported declines of 19% (Odfjell) and 15% (Eitzen Chemical) due to their exposure to the weak product tanker market. BLT has 63 chemical tankers in operations mainly in the regional, stainless steel segment.
No news about the ongoing take-over of Camillo Eitzen.
We make marginal changes to our operating estimates while increase our interest expense assumption somewhat.
Based on our estimates, BLT trades attractively at 80% of NAV and 7.6x 2010e EBITDA (based on 5% higher chemical rates y/y).
A recovery in the world economic outlook should be positive for chemical tanker earnings and asset values. 10% increase in values would increase NAV by over 40%.
For further detailed information, please refer to RS Platou report on BLT's website
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