In an age of technology, there is often very little news left for the old-line industries that got the modern, industrialized world where it is today. These industries have taken their hits, but they are still alive and paying very nice dividends each and every quarter. In many economies, where stock prices are flagging, sometimes sticking to your meat and potatoes is the way to make a respectable return.
Dry Ships Inc., a global transportation company specializing in dry bulk shipping, works to move dry raw materials primarily through its global oceangoing shipping routes. Iron, steel, fertilizer, forest products and ores constitute the majority of products shipped.
The company is currently in the middle of a ship replacement and modernization program. Its 48 vessels are aged under the industry average of 13.3 years and will ultimately average 8.5 years of age after the program is completed. The company expects the sale of 3 vessels, at a net gain, to be complete in the third quarter of 2008, and the taking possession of one new Chinese ship in the first quarter of 2009. In 2007, the company realized a net gain on a total of 11 ship sales. A strategy in this regard is premised on an expected positive outlook for the dry shipment of the company’s primary product categories. The company also has continued its growth with the ordering of two ultra-deep drilling ships and majority stock ownership purchases in Ocean Rig ASA.
Since going public, the company has been following a steady and aggressive strategy with just six vessels. Although not the largest fleet in the world, the company certainly appears to have designs on becoming one of the more profitable, with expansions in non-core areas. If it can manage to keep ahead of fuel prices, it does appear to have a solid plan in place to achieve this goal. An efficient and younger fleet will certainly give it a step up on its competition and a continued steady stream of revenue.
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