I posted 1 minute before you 😬 but deleted it; here’s my opinion:
I see this more as a temporary strain, but not as a guaranteed one-time slip-up.
The business remains profitable, and demand for Ro-Ro transport remains strong, according to the company. The main causes were high fuel costs, rerouting due to the Middle East conflict, and a delay in passing these costs on to customers.
Over the course of the third quarter, cost recovery is expected to take full effect again, and cash conversion should normalize. However, Höegh initially expects Q3 EBITDA to be roughly on par with the weak second quarter. A quick return to the previously high dividends is therefore by no means certain.
My conclusion: no fundamental collapse, likely temporary in part—but the dividend remains highly volatile and dependent on free cash flow. Q3 and Q4 will be decisive.
Only when cash flow and dividends rise significantly again can we speak of a genuine one-time blip.
I see this more as a temporary strain, but not as a guaranteed one-time slip-up.
The business remains profitable, and demand for Ro-Ro transport remains strong, according to the company. The main causes were high fuel costs, rerouting due to the Middle East conflict, and a delay in passing these costs on to customers.
Over the course of the third quarter, cost recovery is expected to take full effect again, and cash conversion should normalize. However, Höegh initially expects Q3 EBITDA to be roughly on par with the weak second quarter. A quick return to the previously high dividends is therefore by no means certain.
My conclusion: no fundamental collapse, likely temporary in part—but the dividend remains highly volatile and dependent on free cash flow. Q3 and Q4 will be decisive.
Only when cash flow and dividends rise significantly again can we speak of a genuine one-time blip.
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@Raketentoni @Dividendenopi Will you stay invested? By how much (%) will the dividend be reduced?
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•@schlimmschlimm I'm not invested; it's fallen from $0.4927 in the previous quarter to just $0.0839 per share.
I have $LPG
I have $LPG
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I've sold it now. I'm going to shift my holdings to Flex LNG.
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•@Raketentoni Thanks! I'm on my way on vacation right now, so I won't be able to check very often.
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•@DustyBottoms But your switch is by no means risk-free:
Both are cyclical, capital-intensive shipping companies.
Flex LNG depends on LNG charter rates, contract extensions, and demand for LNG transport.
High dividends aren’t guaranteed there either.
If you sell Höegh after a weak quarter and immediately buy Flex LNG because of its currently more attractive dividend, you run the risk of simply chasing the last dividend.
Both are cyclical, capital-intensive shipping companies.
Flex LNG depends on LNG charter rates, contract extensions, and demand for LNG transport.
High dividends aren’t guaranteed there either.
If you sell Höegh after a weak quarter and immediately buy Flex LNG because of its currently more attractive dividend, you run the risk of simply chasing the last dividend.
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@Raketentoni Thanks for your take on this. I don’t see this as THE catastrophe either. Hoegh is well-positioned, and even though I’m taking a significant loss today and sacrificing cash flow, it’s a sensible move for the company to keep the money in the business for now. We’ll see how the stock performs over the next few months. Those who bet on the “dividend monster” might want to look around for alternatives. There are a few others in the high-yield shipping sector. And they’re all subject to cyclicality and cost pressures, along with geopolitical risks.
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•@schlimmschlimm I'm staying invested.
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I'm out with a 70%+ gain. It's definitely going to get crushed today when the Amys open.
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•@schlimmschlimm About 83%, if I'm not mistaken
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From a technical perspective, it could also use some revision.
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