Rickmers – UOBKH

1Q08 Results better than expected, management to raise quarterly distribution from 2Q08 by 5%

Rickmers Maritime (RMT) announced a 13.6% qoq increase in charter income to US$22.3m, this was slightly better than expected, due to the early delivery of two vessels, the CMA CGM Jade and CMA CGM Onyx. Earnings for the period however, declined by 10.5% qoq to US$8.4m. This can be attributable mainly to the absence of negative goodwill on business combination (non-cash item) as well as higher transaction fees relating to the issue of new units as well as costs incurred for the upcoming acquisition of 13 containerships. Overall, results were better than expected.


Management to raise quarterly distribution from 2Q08 by 5% to 2.25 US cents. RMT will be increasing its distribution in 2Q08 by 5% to 2.25 US cents. This additional distribution will be funded by additional income from the new vessels which will join RMT’s fleet this year. This implies a full year payout of 8.89 US cents which implies an attractive distribution yield of 10.9% which is in line with our expectations.

Maintain BUY: Target price unchanged at US$1.19 (S$1.61). We continue to like RMT given its vessels are chartered out on long-term fixed time charters, with an average duration of seven years. RMT focuses on only the top liner companies in the world and its customers include Maersk Lines, CMA CGM, Italia Marittima, Hanjin Shipping and Mitsuit O.S.K. Lines. RMT is trading at an attractive distribution yield of 10.9%. We reiterate our BUY recommendation on RMT, with a target price of US$1.19 (S$1.61).