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Novoship's key financials grew in 1Q 2008 in spite of unfavorable conditions in the industry. We are positive about the group's financial results; however, recent consolidation of 96.7% of the company's shares by Sovcomflot would remain a considerable deterrent for growth of the company's stocks.
On May 15, Novoship released its key financial results for 1Q 2008. The company's revenue grew by 13.8% in the accounting period to USD 177.4 mn. The group's net profit, corrected on income from non-core activities received from a fleet sell-off, rose by nearly 5% to USD 60.6 mn. The group's assets did not undergo any considerable changes and amounted to USD 2.32 bn.
The company also announced that it would continue the implementation of its fleet modernization program. By 2010, Novoship plans to increase its fleet by 16 vessels with the total deadweight of 1.5 mn tons. Fleet renovation would further reinforce Novoship's position in the industry. Nonetheless, an upward trend in aggregate world fleet volume is a considerable risk factor for the company, which could lead to excessive supply on the freight market and a downturn in freight rates.
We are generally upbeat on the company's financial results for 1Q. The company improved its financials in spite of negative trends on the freight market. However, we should wait for the publication of a complete financial report in order to draw any final conclusions. Moreover, recent consolidation of 96.7% of the company's shares by Sovcomflot would remain a deterrent for growth of the company's stocks. Our recommendation and target price for the company's shares are currently under review. Vladimir Sergievskiy
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Novoship
Capitalization: $959 646 000,00
Common shares:
Price: $2,40
Delta week: 0,00%
Delta month: 0,00%
Delta year: -14,3%
Preferred shares:
Price: $0,46
Delta week: -4,2%
Delta month: -21,6%
Delta year: -75,1%
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0.569
0.073
