“The strategy is to invest in companies with good balance sheets that can unlock long-term value through investments at the low-point of the cycle,” Frode Moerkedal and Rahul Kapoor, analysts at Platou, wrote in a note today. “Such examples are A.P. Moeller-Maersk, Diana Shipping and Frontline 2012.”
Copenhagen-based Moeller-Maersk is the owner of the world’s largest container line, while Athens-based Diana Shipping owns and operates 27 dry-bulk vessels. Frontline 2012 was formed as part of a reorganization by tanker operator Frontline Ltd., which today completed a restructuring as it sold vessels, pared commitments for new ships and eliminated bank debt to tackle a slump. The Bermuda-based company last month said it would split the company to withstand the worst shipping rates since 1999.
The industry this year will still “struggle” with high fleet growth for tankers, dry bulk and containers and with lower rates on average in 2012, the analysts said. The “tide should start to turn and a bottom be reached during 2012 with a gradual improvement of fleet utilization and earnings as fleet growth slows and demand recovers the next few years.”
Maersk (MAERSKB) dropped 25 percent last year, while Diana Shipping declined 35 percent and Frontline Ltd. 83 percent.
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