Excel Maritime Carriers Ltd., a dry bulk shipping company, operates a variety of ocean going transport ships specializing in the movement of dry bulk items such as coal, sugar, bauxite and scrap metal. The company has a deadweight tonnage of 3.9 million tonnes and currently operates 47 vessels.
Although there have been certain accounting issues surrounding the company’s fourth quarter reporting, it should be noted that these issues will be resolved by the end of 2010. The issue revolves around the acquisition of ships in 2008 and the longer-term contracts associated with these ships. The contracts, at the time, might have been better written, which led to the accounting issue and the general recognition that revenue generated was higher than was reality. Nonetheless, if the investor takes the longer view, this irregularity may be an opportunity.
Reporting results may be difficult in 2010 but the outlook going forward is not. The company has a solid fleet of ships working globally and does appear to be getting these poor contracts under control. Even with these issues the company can be recognized as one that is running a solid enterprise and prepared for the eventual return of the world economy. Shipping of bulk goods is a “first out” signal when an economy has hit bottom and one that should be very closely watched. As it turns out, the end of 2010 is likely when the world economy will be leaving the current economic cycle behind. Excel Maritime may well be right in step with this timeline to benefit.