Excel Maritime Carriers, Ltd. (EXM), a leading sea-borne transporter for dry bulk cargoes, recently improved and consolidated the time charter contracts for its fleets. One of its vessels called M/V First Endeavour, with a carrying capacity of 69,111 Deadweight tonnages (DWT), will enter into a 1-year time charter agreement. The gross base rate will be $17,500 per day.
With this new time charter deal, Excel Maritime has now secured under time charter employment of 64% of its operating days for the fiscal year ending December 31, 2011. The situation has markedly improved from the end of 2010.
During 2010, the company had secured under time charter employment of 56% of its operating days. This will result in increasing cash low visibility during 2011. While for its Capesize fleet, the company has secured 92% and 79% of their operating days for 2011 and 2012, respectively.
As a leading global dry bulk carrier, Excel Maritime is capitalizing on its established reputation for maintaining high standards of performance, reliability and safety. Reduction of large spot exposure will undoubtedly help Excel Maritime to consolidate its financials going forward.
Continuation of global economic recovery, albeit at a very slow pace, will also help the company to sustain its businesses. Management has undertaken a balanced fleet deployment strategy of spot and period time charters that seek to maximize charter revenue while maintaining cash flow stability.
Excel Maritime primarily competes with Diana Shipping Inc. (DSX), Genco Shipping & Trading Ltd. (GNK), and DryShips Inc. (DRYS).
We, thus, maintain our long-term Neutral recommendation for Excel MaritimeCarriers, Ltd. Currently, Excel MaritimeCarriers, Ltd. has a Zacks#4 Rank, implying a short-term Sell rating on the stock.
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