L’obiettivo di questo lavoro è stato la creazione di uno strumento per la valutazione del segmento dry cargo mediante il quale derivare il posizionamento delle società in esso operanti. A tal fine, sono state individuate le seguenti macroaree di analisi: struttura della flotta, parametri economico/patrimoniali e drivers operativi. Successivamente è stata redatta una ranking list che valutasse in maniera integrata i differenti key drivers. Lo studio ha evidenziato un forte legame tra l’età media della flotta e le performance delle società, ma anche una non diretta correlazione tra queste ultime e le strategie di ownership. La redditività marginale, poi, sembra essere legata alla concentrazione su non più di due segmenti di navi, dei quali almeno uno di tonnellaggio elevato. Inoltre, il ritorno sul capitale proprio fluttua attorno al valore medio pari a circa il 10%; ciò a dimostrazione del fatto che il segmento dry bulk ha fronteggiato in maniera soddisfacente la crisi nel 2010. Interessanti correlazioni si sono poi evidenziate tra struttura della flotta e parametri operativi. In particolare, la copertura sul time charter appare proporzionale al tonnellaggio delle navi. In aggiunta, le società con le flotte più vecchie riportano minori valori di mercato rispetto a quelli iscritti in bilancio; ciò in accordo con la situazione attuale di oversupply che premia le navi più giovani. In sintesi, tale studio si propone di formalizzare e porre in termini quantitativi valutazioni che gli armatori affidano abitualmente alla loro esperienza. The aim of this project is to implement a competitors valuation tool for dry cargo segment. Accordingly, three analysis fields have been identified, namely: fleet structure, key financials and efficiency and effectiveness. Thereafter, a ranking list has been produced in order to suitably compare different key drivers. The study showed clear correlation between fleet average age and company performance. In addition, different ownership strategies resulted equally successful. As for percentage profitability, this seemed to be correlated with the concentration on no more than two segments (of which at least one of bigger vessels). Similarly, leverage level appeared to affect company performance. Return on equity fluctuating near the average figure of about 10% revealed that dry cargo shipping business well faced the crisis into 2010. As far as correlation between fleet structure and efficiency and effectiveness is concerned, time charter coverage is related to vessel size. Moreover, companies with oldest fleet suffered from lower market value compared with book value according to current oversupply momentum Overall, the analysis carried out has the purpose to quantify market valuations which are usually based on shipowners experience and instinct.

1. Competitors valuation tool Dry Cargo Sector Componenti del PW: Carlo Maria Forte Gerardo Daniele Miscuzzi Giorgia Riccardi Tutor: Giovanni Capello Group Planning & Control Manager Master in Shipping Napoli, 1° Aprile 2011

3. Size

4. Ownership

5. Average Age

6. …

7. Key Financials (KF):

8. Margins / Growth

9. Assets / Net Debt

10. Returns indicators

11. …

12. Efficiency & Effectiveness (EE):

13. Daily TCE

14. Cost structure

15. Coverage

16. …Master in Shipping

17. Selected Companies Overview Master in Shipping

19. Including short term charter-in D/S Norden current fleet consists of ~ 150 vessels

20. Pacific Basin and D/S Norden have the lowest ownership percentage

21. Globus has the smallest fleet (only 5 vessels)

22. Only D/S Norden, Genco and Seanergy operate in all four segments

23. Eagle Bulk is focused on Handymax segment (all sisterships)

24. In terms of higher number of vessels per segment: HandysizePacific Basin, Handymax Eagle Bulk, Panamax Excel Mtm. and CapesizeNavios

25. 70% of analyzed companies completely owns their active fleet

26. Common fleet size is between 35 and 50 vessels (outliers Pacific Basin and Globus Maritime) mainly Handymax and PanamaxMaster in Shipping Source: SEC filings/ Company Report (31/12/10) – RS Platou (October 2010)

28. TBS Int. controls the oldest fleet (the average age is partially reduced by young Handysize multipurpose tweendeckers)

29. The average segment age of Excel Mtm. fleet is not homogeneous; the company states its intention to reduce it

30. The strategy of almost all the competitors has been focused on young fleet

31. 38% of the companies manages a fleet older than the average (7.4)

32. Small segments contain older vessels: Capesize, Panamax, Handymax and Handysize average age is respectively: 5.9, 7.2, 8.2 and 9.0. Pacific Basin and Seanergy reflected a countertrend Master in Shipping Source: SEC filings/ Company Report (31/12/10) – RS Platou (October 2010)

34. The increase in D/S Nordenfleetismainlyfocused on Handysize and Handymax

35. SafeBulkersremainsfocused on Panamax

36. Excel Mtm., Globus Mtm., and Seanergy do not have newbuildings at all

37. Genco fleet grew from 34 to 49 vessels (12 Handymax)

38. D/S Norden fleet grew from 2009 by 54% and is still expanding with 30 newbuildings. Opposite growth trend for Dry Ships (decreasing trend)

39. More than 50% of companies will have a global presence ranging between 3 and 4 DWT/million

40. Overall, newbuildings are 102: 36 Handysize, 25 Handymax, 24 Panamax and 17 Capesize, for about 7.6 DWT/MM (24% of relative existing fleet)Master in Shipping Source: SEC filings/ Company Report (31/12/10) – RS Platou (October 2010)

42. Excel Maritime and TBS have the highest incidence of depreciation and impairment (due to old fleet)

43. Low value of TCE/Revenues for D/S Norden, Pacific Basin and TBS suggests an high incidence of voyage charter (mainly as an employment strategy on short term activity)

44. The smallest segments (with exception of Seanergy) seem to have the highest incidence of voyage charter

45. For Navios and Paragon total revenues come from TC hire

46. Most profitable competitors are: D/S Norden, Genco, Dryships and Diana

47. Norden and Dryships exchange their position from EBIT to Net Income due to a completely different financial structureMaster in Shipping Source: SEC filings/ Company Reportsasof 31/12/10 – RS Platou (February 2011)

49. Safe Bulkers shows the highest EBITDA/EBIT margin combination with a significant volume

52. Debt and loss due to financial instruments have a negative incidence on DryShips ROE

53. TBS shows negative figures of ROE and ROCE and a downward ROE trend

54. Safe Bulkers ROE plummeted due to massive capitalization

55. Globus experienced the most significant growth in ROE

56. DS Norden is not leveraged

57. Average ROE (not considering TBS) is 10.2%, and average ROCE is 6.8%

58. 46% of companies shows a leverage (ratio between long term debt and equity) above the average (1.07) Master in Shipping Source: SEC filings/ Company Reportsasof 31/12/10 – RS Platou (February 2011)

60. D/S Norden, Excel Mtm. and Pacific Basin invested over the period using their own cash (equity instead of debt)

61. Seanergy investing cash flow is affected by the acquisition of other business (with positive cash position) by using a share issuance

62. Investments level still high in 2010 (lowest net investments around $70 mln) with a different finincing strategy (in some cases affected by existing debt repayment impact) Master in Shipping Source: SEC filings/ Company Reportsasof 31/12/10 – RS Platou (February 2011)

64. Navios has the lowest ratio fleet/fixed assets

65. Eagle Bulk and Safe Bulkers show the worst ratio net debt/ fixed assets with a stretched fleet

66. Considering the trend of fixed assets and gross debt volume, Excel Mtm isanexception due to a consolidated debt structure on old vessels

67. The average figure for net debt/fixed assets is 39% (excluding TBS Int.)

68. D/S Norden has a liquid structure (no outstanding debt and consequently a positive net indebness) meaning a strongly different strategy compared with other CompaniesMaster in Shipping Source: SEC filings/ Company Reportsasof 31/12/10 – RS Platou (February 2011)

70. In the Handymax segment Genco experienced higher TCE rates than Eagle Bulk with a lower TC coverage

72. During the first half 2010 Genco achieved the higher daily TCE in all segments (near to indexes) with the exception of CapesizeMaster in Shipping Source: SEC filings/ Company Reports (H1 2010)

74. Excel Mtm. has a complete exposure in Handymax segment for the next three years and in Panamax segment for 2012 and 2013

75. Safe Bulkers is generally the most covered company for the next three years

76. DryShips shows the best coverage average percentage in 2011 but is significantly exposed in the next years

77. The coverage seems to be proportional to segment (the bigger the vessel the higher the coverage)

78. By 2013 there will be a substantial decrease in coverage, except for Capesize vesselsMaster in Shipping Source: JeffriesresearchasofDecember 2010

80. Balanced cost structure, high volumes of TCE revenues and similar fleets for Dry Ships and Navios. In addition these companies have the same (and highest) level of daily G&A

81. Excel Mtm., Safe Bulkers and Seanergy reveal a good cost structure with an average of 60% opex, 20 % G&A and 20% financing costs

82. D/S Norden, Genco, Seanergy, Safe Bulkers and Pacific Basin daily G&A’s under the averageMaster in Shipping Source: SEC filings/ Company Reports (Q3 2010)

84. Excel Mtm. shows the greatest fleet value spread with market value significantly lower than book value

85. Companies with oldest fleet suffered from lower market values compared with book value

86. Overall, the average vessel market value is lower than book value with the exception of Safe BulkersMaster in Shipping Source: Morgan Stanley researchasof 17/01/11 - SEC filings/ Company Reportsasof 31/12/10

88. Average age (FS)

89. EBIT margin (KF)

90. ROE (KF)

91. Leverage (KF)

92. Interest incidence: (KF) (EBIT-net income)/|EBIT|

93. Net debt (KF)

94. Daily Interests (EE)

95. Daily G&A (EE)2nd 1st 4th 3rd Master in Shipping

97. Different ownership strategy can be equally successful

98. Percentage profitability (EBIT margin) seems to be correlated with the concentration on no more than 2 segments (of which at least one of bigger vessels - Capesize/Panamax, except for Eagle Bulk)

99. Leverage level in general affected company performance

100. ROE fluctuating near the average figure (about 10%) meaning that dry cargo shipping business well faced the crisis into 2010

101. In 2010 we registered two main cluster of investing policy: investments matched with debt (lower ranking position) and investments supported by equity (higher ranking position)

102. The bigger the vessel the higher the coverage

103. Balanced cost structure: ~60% opex, ~20% G&A, ~20% financing cost