Ski's Maritime Economics Review

Ski’s Maritime Economics?
Eagle posted revenue Q3-10 at $72.8M vs. Q3-09 at $41.5M. And I quote “Net revenues of $72.8 million, an increase of 75% compared to $41.6.”. Wow, a 75% jump in revenue compared to Q3 last year. Let’s have a look at this calculation.

2010 $72,825,583 revenue net of commissions, reporting a net income of $8.2M (operating 39 vessels) divided by 62.4M shares = $0.13.
2009 $41,551,805 revenue net of commissions, reporting a net income of $0.5M (operating 25 vessels) divided by 53.4M shares = $0.01.
Revenue Q3-10 yoy is up 75.26%. They got that right and they proudly published the accomplishment.
Net Income Q3-10 yoy is up 1540%. Do you wonder why they don’t publish this unreal looking improvement?

Let’s roll this out to a year to date comparison (9MOS).
Revenue 2010 (9MOS) =$192.6M
Revenue 2009 (9MOS) =$150.5M
Net Income 2010 (9MOS) =$23.8M
Net Income 2009 (9MOS) =$31.1M
They have reported a 27% increase in ytd revenue for the first 9 months over last year, and they proudly reported it. During the same time net income has dropped ytd -23.47% and no they do not mention this number.

It does get worse!
Look at this ugly set of numbers produced when we look at Earnings per Vessel operated.

Eagle NI/VT = Net Income/ Vessel Tally (Monthly Average)

2010 9MOS Net =$23.8M or ($0.38/sh) operating 39 vessels = $67,806 per vessel.
2009 9MOS Net =$31.1M or ($0.58/sh) operating 25 vessels=$138,222 per vessel.

Eagle the company was diluted ~16.85% and operates 56% more vessels meanwhile providing shareholders a net income decrease of 23% when compared to the first 9 months of last year.

This is exactly how I will examine Safe Bulkers next time.

Good Fortunes
Ski