Oppenheimer’s 4th

We had the pleasure of attending Oppenheimer’s 4th Annual Industrials Conference this week. Reflecting difficult and uncertain markets, the tone was muted and at least at the open presentations interest has seemingly flagged. Like the owners waiting for the perfect distressed deal, investors, too, seem to be circling and asking the difficult questions. Can you maintain your dividend? How low will asset values fall and so on? We wouldn’t call it bearish but it was certainly circumspect. Here are some of our takeaways. As always we leave the analysts to do the heavy lifting on the numbers.

The early morning slot went to Capital Product Partners LP with Iannis Lazaridis presenting the company. Despite the continued deterioration in the product markets, CPLP’s strategy of long-term employment continues to pay-off with 3rd quarter results in line with expectations. Distributable income was down due to lower revenues from a lack of profit sharing and higher interest costs attributable to the increased margin agreed in the recent loan amendment.

However, the company now has to face the difficult market with eight vessels coming off hire in 2010. MR spot market rates are at the lowest level in 20 years and consequently period activity is reduced.

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Full House in Athens – Part 2

By Kevin Oates

…in the longer term shipping should correct but quality, transparency and financial strength are key to survival.

Despite the tough market and the general lack of ship finance, Marine Money’s Greek Ship Finance Forum again filled the seats in Athens.  With 310 delegates and speakers and some 40 more for the TEN Ltd lunch, there was plenty gossip and exchange of views at the 11th Annual conference held on the 8th of October 2009.

The event had started with a speaker’s dinner the previous night co-hosted by Navios Maritime Holdings and was to end in the early hours of the following morning at the Capital Party co-hosted by Capital Product Partners LP at a well-known Athens nightclub.  Even if the market is tough, we still know how to enjoy ourselves.

Back at the conference, our day began with Guy Verberne, a leading economist at Fortis Bank (Nederland) telling us that the economic recovery has come and it may well be sustainable.  China, he says, has plenty foreign reserves to prolong it’s stimulus package for as long as it needs and he sees no meaningful cutbacks from the stimulus packages of western governments, at least through 2010.  A risk is a double dip in 2011 if we get too bogged down in debt.
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