Presentation

Established in 2017 and headquartered in Bermuda, 2020 Bulkers initially ordered two scrubber-fitted Newcastlemaxes at New Times Shipyard in China. This was later expanded to eight ships, four of which were delivered in H2’19. Two additional units joined the fleet in January 2020, while the last two were delivered in June. The company went through a series of equity raises while being OTC-listed in 2017–19, and subsequently IPO’ed on Oslo Axess in July 2019. Today, 2020 Bulkers has a market capitalization of around USD 150m, and net debt of USD 240m as of Q2’20. The company is backed by Tor Olav Trøim who controls ~38% of the shares outstanding.

2020 Bulkers has so far contracted the ships on 1-3y index-linked TCs with a share of the scrubber profits, fixing part of the periods at flat rates. With a cash break-even rate of USD ~15,000/day, the company has a clear strategy of paying out the majority of its generated cashflow to shareholders as monthly dividends. This highlights 2020 Bulkers’ commitment to shareholder returns and what it believes is a much-needed new business model in the drybulk segment.

We estimate the NAV in 2020 Bulkers to NOK 64 per share at YE’20. We argue the company should trade on par with - or even above - NAV, as the focus should increasingly be on the company’s ability to outperform peers in a tough market and pay out industry-leading dividends. Moreover, the brand new, scrubber-fitted and relatively small fleet potentially makes the company an attractive acquisition candidate for some of the larger companies in the space.