Naviera Armas

All,

Please find out new analysis on Naviera Armas here.

We have not yet taken a position. High CapEx in recent periods and slower than expected realisation of synergies have drained the company’s time and monetary resources. The company needs to grow into its capital structure now or it will sooner or later run out of cash. Another risk is its deep interwoven ties with other businesses of the Armas family.

There is however a chance that the recent CapEx spent has raised primarily the fixed costs of the company and that therefore H1 of any given year (the lower revenue half) only barely breaks even and that H2 becomes that much more profitable. We wouldn’t want to bank on it however. Mor work would be required.

Wolfgang