Excel Maritime Carriers Ltd. (EXM), a leading worldwide seaborne transporter for dry bulk cargoes, recently improved and consolidated the time charter contracts for its fleets. The company announced that it has entered into time charter agreements with first class charterers for seven of its Kamsarmax vessels. Excel Maritime is trying hard to recharter a total of twelve Kamsarmax vessels by the end of 2010.

Out of the seven Kamsarmax vessels, which won new time charter contracts, four were fixed for a period of 11 to 13 months at a daily rate linked to the Baltic Panamax Index (BPI) with a guaranteed minimum rate also called floor rate. The remaining three vessels are fixed under separate time charters for a period of 12 to 14 months at a daily rate linked to the BPI with a guaranteed minimum rate.

Notably, with these time charter contracts, Excel Maritime can capitalize the upside potential of the market movement through the index-linked arrangement.

With this new time charter deal, Excel Maritime now secured under time charter employment 45% of its operating days for the next fiscal year ending December 31, 2011. The situation has markedly improved from the end of the third quarter of fiscal 2010.

At that time, the company had secured under time charter employment just 27% of its operating days for fiscal year 2011. Excel Maritime has already secured under time charter employment 68% of its operating days for the rest of 2010.

As a leading global dry bulk carrier, Excel Maritime is baking 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 seeks to maximize charter revenue while maintaining cash flow stability.

Excel Maritime mainly competes with Diana Shipping Inc. (DSX), Genco Shipping & Trading Ltd. (GNK) and DryShips Inc. (DRYS). We maintain our long-term Neutral recommendation for Excel Maritime. Currently it is a short-term Zacks #3 Rank (Hold) stock.

 
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