On February 1, 2007, Novoship released its consolidated traffic data for 2006. According to the company’s official spokesperson, cargo traffic jumped 30% y-o-y to 66.7 mln tons.
It’s noteworthy that the company posted a 30% surge in cargo traffic against the backdrop of a 24% rise in aggregate deadweight, which clearly reflected the improved efficiency of fleet operations.
Another important aspect of the company’s operations is stronger growth of international traffic vs. domestic shipments (35% vs. 5%), as a result of implementing the company’s strategy to improve the most profitable business segment.
We are upbeat on Novoship’s FY06 operating results and project a rise in its key operating and financial indicators in the reporting period. We assign a Buy recommendation to Novoship with a target price of $2.75 per common share and $1.60 per preferred share.
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