Scanship Holding

Country:
Sector:
Market cap (m):
Norway
Capital Goods
NOK 2,033.94
Bloomberg:
Reuters:
Website:
SSHIP NO
SSHIP.OL
Share price (close):
NOK 19.90

Latest Reports

23 OCT 2019
Commissioned Research: Story continues to develop favourably
We believe the cruise industry will continue to be a core market for Scanship, which has a strong presence already and will likely increase its market share within newbuilds. It will also benefit from global fleet growth; we expect an additional 100 newbuilds to be delivered by 2030, compared to the current order book of 92 cruise ships. Furthermore, we see a trend of increasing total clean ship system deliveries, and combined with the potential of pyrolysis incinerators, we believe that Scanship's order size per cruise ship will increase going forward. Carnival Corporation is set to be its largest opportunity within retrofits, as many of its cruise liners have poor environmental standards. We believe that the land-based markets within carbon capture and waste-to-energy represent a major opportunity, even though the timing is uncertain. We derive a DCF-based fair value range of NOK 18-23 per share for Scanship Holding. - Marketing material commissioned by Scanship Holding

29 AUG 2019
Commissioned Research: Growth within existing and new markets
We believe that Scanship will continue to prosper on its legacy, delivering waste and wastewater treatment systems to the cruise industry. The global cruise fleet consists of 92 newbuilds with delivery from end 2019. We expect that an additional 100 newbuilds will be ordered and delivered by 2030 to cope with capacity demand. As stricter regulations demand more advanced systems in order to treat wastewater, we believe that Scanship will increase its market share and lift order size per ship. Carnival Corporation, the largest cruise owner, will become its next key client, we believe. We think Carnival Corporation may retrofit parts of its fleet, as many of its cruise liners have poor environmental ratings. By acquiring ETIA, Scanship will gain access to the European land-based market as ETIA will act as its operational platform. We derive a DCF-based fair value range of NOK 18-23 per share for Scanship Holding.

10 MAY 2019
Commissioned Research: New technology will boost contract size
We revise our 2019, 2020 and 2021 EBIT estimates up by 24%, 36% and 55%, respectively. We believe the company will secure retrofit contracts in the short term; it is also tendering for 30 newbuild contracts, which will support long-term growth. Its newly developed product, MAP (microwave-assisted pyrolysis), has the potential to double the contract size for newbuilds. Scanship has low operational and financial gearing with low reinvestment requirements for existing business, setting the foundation for significant FCF growth in the coming years. We raise our fair value range to NOK 10.7-14.1 (5.0-7.0) based on base- and high-case DCF valuation. Marketing material commissioned by Scanship Holding.

Commissioned Research: Continues to excel in a growing market
Scanship reported H2 numbers above our expectations, and continues to excel in a consolidated cruise industry delivering its sustainable waste and wastewater treatment systems. H2 2018 revenues came in at NOK 183m, 10% above our estimate. We are confident that Scanship will continue to deliver on our estimates going forward. It reported an all-time-high year-end order book of NOK 656m, up 40% y/y, with an additional NOK 200m in options, in line with our estimates. The expected growth in the cruise industry bodes well for the company, as it is tendering for an additional 22 newbuilds. With strong financials and increasing cash flow, the board will propose a semi-annual dividend of NOK 0.10, which we find positive. We calculate a higher fair value range of NOK 5.0-7.0 (NOK 4.9-7.0). Marketing material commissioned by Scanship Holding

19 FEB 2019
Commissioned Research: A green ocean strategy
Thanks to its distinctive technology for handling marine waste and wastewater, Scanship should continue to benefit strongly from the "green wave". There is an increasing sustainability mindset among ship owners, passengers, and legislators that sea pollution must be reduced and eventually eliminated. Scanship has substantial experience in this niche and a particularly strong standing among the world's largest cruise ship operators. Given steady growth in the global cruise fleet and increased environmental demands, we find that Scanship is well-positioned. Moreover, Scanship is supplementing its offering with waste-to-energy products and has even expanded their use to onshore markets, including the aquaculture industry. With innovative technology, a strong market position and capable management, we believe the outlook is promising. Marketing material commissioned by Scanship Holding

Equity analysts

Senior Analyst

Key persons

CEO: Henrik Badin

CFO: Erik Magelssen

Chairman: Narve Reiten

Numbers
Nordea
NOKm
2015
2016
2017
2018
2019E
2020E
2021E
Total revenues
200.3
171.6
247.0
329.6
409.0
674.1
812.5
Ebitda (adj.)
11.00
-3.44
24.53
38.92
50.60
93.66
120.40
Ebitda - margin
5.5%
-2.0%
9.9%
11.8%
12.4%
13.9%
14.8%
EBIT (adj.)
8.3
-5.8
21.3
35.5
43.6
86.5
113.1
EBIT (adj.) margin
4.2%
-3.4%
8.6%
10.8%
10.7%
12.8%
13.9%
PTP (adj.)
6.7
-5.1
17.3
33.2
43.3
82.7
109.3
Net profit from cont oper (adj)
4.95
-4.00
13.68
27.66
33.94
64.49
85.24
Shareholders´ Equity
49.8
45.4
57.9
93.4
219.4
283.9
369.2
Net interest bearing debt
8.5
21.6
16.3
-4.0
78.9
56.8
-11.6
Net gearing
17.1%
47.6%
28.2%
-4.3%
36.0%
20.0%
-3.2%
Net debt/EBITDA
0.8
-6.4
0.7
-0.1
1.6
0.6
-0.1
Free cash flow to equity
15.4
-13.2
5.3
19.8
-174.6
25.9
72.2
Diluted number of shares in issue, year-end (m)
96.5
96.5
96.2
96.4
99.9
102.2
102.2
Nordea Markets estimates published on Oct 23, 2019
Source: Company data, Nordea estimates
Per share data and multiples
Nordea
NOK and %
2015
2016
2017
2018
2019E
2020E
2021E
EPS (adj.)
0.05
-0.04
0.14
0.29
0.34
0.63
0.83
EPS (adj.) growth
166.8%
-180.9%
442.8%
102.0%
18.3%
85.7%
32.2%
DPS
0.00
0.00
0.00
0.20
0.00
0.00
0.00
BVPS
0.5
0.5
0.6
1.0
2.2
2.8
3.6
P/E (adj.)
20.3
n.a.
29.9
16.0
58.6
31.5
23.9
EV/Sales
0.54
0.66
1.72
1.33
5.05
3.10
2.49
EV/EBITDA (adj.)
9.90
n.a.
17.34
11.26
40.85
22.32
16.80
EV/EBIT (adj.)
13.09
n.a.
19.94
12.36
47.45
24.18
17.88
P/BV
2.01
2.02
7.06
4.74
9.06
7.16
5.51
Dividend yield
0.0%
0.0%
0.0%
4.4%
0.0%
0.0%
0.0%
FCF Yield bef A&D, lease adj
15.3%
-14.4%
1.3%
4.5%
1.1%
1.3%
3.6%
RoE
9.4%
-10.2%
24.3%
35.2%
21.4%
25.6%
26.1%
ROIC
9.6%
-6.8%
21.5%
29.4%
15.9%
19.2%
22.3%
Nordea Markets estimates published on Oct 23, 2019
Source: Company data, Nordea estimates

Source: Thomson Reuters