2009 – A GOOD OR BAD YEAR?

Last year, we wrote on these pages that 2008 was a year when profitability for shipping companies held up better than returns to shareholders. This was primarily due to the fact that the global financial and shipping crisis did not become fully evident until September of 2008, giving most shipping companies close to three quarters of strong financial results in 2008. The dramatic fall in share prices and cuts in dividends did not occur until the fourth quarter of 2008. As the financial markets are forward looking and financial results are backward looking, this was not entirely surprising. We also stated that the price to book and EV to EBITDA valuation metrics were implying that by the end of 2008 the financial markets may have overshot and the share prices of shipping companies were undervalued.

This is only an excerpt of 2009 – A GOOD OR BAD YEAR?

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