Shipinvest4004 The leading ship finance software
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Transcript of Shipinvest4004 The leading ship finance software
1Norwegian Maritime Solutions presents Shipinvest4004
Shipinvest4004
The leading ship finance software
Norwegian Maritime Solutions
John Colletts alle 117
0870 Oslo, Norway
Tel: + 47 22 95 08 70
e-mail: [email protected]
www.shipstrategy.com
2Norwegian Maritime Solutions presents Shipinvest4004
Shipinvest4004 is a unique tool for analysis and appraisal of ship and rig investments
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Shipinvest4004 comprises of three modules
INVESTMENTANALYZER
CORPORATE CONSOLIDATION
HISTORICALANALYSIS
FAST PROJECT
STANDARD PROJECT
Equivalent to ”back-of-an-envelope” calculation. Produces a calculation in 30 seconds
Allows a tailormade input with a whole range of options: several loans, equity payments and dividends, type of loan, loan details etc
Calculating numbers for a range of vessel investments. This will show consolidated figures for cashflow, loan payments and other.
To be used for corporate consolidation or ”individual consolidation” for e.g. KS investors having various % equity in the ships
User can specify his own timeseries for various ship types: TC rate, oper cost, NB cost, S/H values, scrap prices etc in order to calculate how good or bad certain investments have been on a historical basis. Also useful to compare statistical expectation of return in various segments
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What is Shipinvest4004 ?
• Shipinvest4004 is a program for investment analysis of shipping projects. Asset management functions include:
– When to buy– When to sell– How to finance
• Shipinvest4004 will quickly calculate key figures such as:– Annual cash flow projects– Break even tc rates– Required sales prices at end of a cp period– Internal rate of return– NPV– Sensitivity
• Additionally Shipinvest4004 includes two modules that handle:– Corporate Consolidation
• Allow the user to consolidate single ship investment projects to explore consolidation effects
– Historical analysis• Users can add their own time series for different ship types where one can analyze the
historical return on investments. This feature is useful to dtusy statistical expectations and variances in the sectors.
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Fast Project – all input on one screen – Results in 30 seconds !
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Required TC rates to yield 12 % (*) IRREQ
(*) If 12 % is what the user has specified as target return
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Internal Rate of Return as a function of Residual value
IRR – Three numbers:IRR on TOTAL capital:Is the rate of return for the investment calculated as if the entire ship is purchased on a cash basis (i.e. no financing)
IRR on EQUITYThe rate of return based on the equity put into the project. This will often show the effect of gearing up the project.
IRR on EQUITY modifiedThis assumes that cash generated by the project is NOT taken out of the project but that proceeds are kept in a bankaccount where it earns the interest rate that is specified input. This method is a lot more ”sober” than the standard IRREQ.
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Value of vessel = Discounted value of operating results + expected residual value
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Visual presentation: Required TC rates for the 10 years period
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Visual presentation: Return on Capital employed
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Historical analysis: 10 years old in % of NB price for a panmax BC
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Historical analysis: Payback period for a panmax BC
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Corporate consolidation: Individual ship investments to be consolidated
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Corporate consolidation: Break down on the individual investments
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Investment case: Buying a supramax ‘Free Lady’
• Major importance– Size: 50,000 dwt– Built: 1993 (I.e. vessel is 18 years old)– Date of purchase: October 2011– Lifetime: Assume 25 years (i.e. 7 years remaining life)– Purchase price: Between 22 and 23 mill USD– Scrap value estimate: 5 mill USD (at the end of 7 years operation)– Finance: 70 % / 7 years repayment / 5 % interest rate– Operating costs: 5,000 USD/day (including allocation for drydocking– Increase in operating costs: 3 % p.a.
• Minor importance:– Operating days p.a.: 350 days– Interest rate on cashflow: 3 % p.a.– Nr of installments/interests terms p.a.: 2 (i.e. every 6 months)
32Norwegian Maritime Solutions presents Shipinvest4004
Investment case: Buying a supramax ‘Free Lady’
Key questions to answer:
– Major issues to address:• Is this a ‘good’ investment ?
– What is a ‘good investment’ ?– What tc rate do I need to get my required internal rate of return.
Assume I need IRR on equity of 12 % p.a.– Can I obtain the required tc rate in today’s market ?– If I cannot get the required tc rate today, can I hope for an increase
in the value after 2,3 or 4 years, and in such case what price do I need to recover my investment
– Minor issues• Do I run into periods with negative cash, and if so, how can I cover
such deficits (additional lending ?)• Do I get a positive NPV ? • How sensitive are some of my assumptions ?