Thread by @lzab1453

🧵🧵🧵 D'Amico International Shipping ( $DIS.MI) is a shipping company operating a fleet of 35 Product Tankers, ranging in size between Handysize and LR1s.

The average age of the fleet is 6.9 yrs vs an avg. age of 12 yrs for the global product tanker fleet.

CAPEX: After a big fleet renewal program started in 2012 (investment of more than $900m) the company has no other CAPEX commitments other than regular maintenance (dry dockings/special surveys)

Employment Strategy: a mixture of TCs and Spot depending on where we are in the market cycle. Given the very good market fundamentals, the company has a strong spot exposure with 75% of remaining '22 days.

Market: the product tanker market has been on fire since Q1 '22 caused just in part by the war in Ukraine. The main reason for the improvement in market condition is the dislocation of new refineries vs the main consumption regions of oil products and the closure of existing ones

Financials: after some tough years in which the main shareholder in the company always supported it, the company is now deleveraging and reducing its cost of debt by refinancing expensive sale and leasebacks with cheaper bank finance.

Fleet LTV is <50% and estimated cash breakeven (including OPEX, G&A, interest and debt service) is around $16,800/day per vessels vs current spot rates of around $45,000-$50,000/day for MRs

Valuation: the company trades at ca. 50% NAV, cheaper than most of its peers ( $STNG, $TRMD, $ASC), and this is probably also due to the fact it trades on the less liquid Milan Stock Exchange

Conclusion: I believe the product tankers' market will remain strong and $DIS.MI will catch up with its peers on the valuation side. I expect an EBITDA of around $55m-60m for Q3 '22, for a company with a $270m mkt cap.

The Target Price in my mind is in the €0.35 range and I believe this could be achieved with a strong Q3 performance (which I expect).

Please do your own due diligence and the above does not constitute financial advice.

#shiptwit $STNG $ASC $TRMD

Disclosure: I am long DIS.MI