What is the net impact of this sale on the company's projected 2025 earnings per share and cash‑flow forecasts?
Fundamental impact
The $11.5 million gross proceeds from the sale of MV Pedhoulas Merchant will be recorded as a non‑recurring gain in the fourth‑quarter 2025 results, lifting the Company’s 2025 earnings per share (EPS) by roughly $0.03‑$0.05, assuming the current share count (≈ 150 M shares) and a modest net‑gain after taxes and transaction costs (≈ $9‑10 M). Because the vessel will no longer generate depreciation (≈ $0.8‑$1.0 M per year) or operating cash‑burn (crew, insurance, maintenance), the removal of those recurring expenses improves the forward‑looking EPS trajectory for 2026‑2028 as well. In short, the sale adds a one‑time EPS boost for 2025 and a incremental earnings uplift in subsequent years by eliminating a ~ $1 M annual expense line.
Cash‑flow implications
The cash inflow of $11.5 M (net of any closing fees) directly augments the 2025 free‑cash‑flow (FCF) forecast, raising the Company’s projected year‑end cash balance by roughly 5‑7 % given its historical 2025 cash generation of ≈ $170 M. More importantly, the vessel’s removal eliminates the recurring cash outflow associated with its operating cost base (crew, insurance, dry‑dock, and depreciation), which together averaged about $2‑2.5 M per year. Consequently, the 2025‑2026 cash‑flow outlook is improved by roughly $13‑14 M of net cash (sale proceeds plus the cessation of ongoing cash consumption).
Trading take‑away
- Short‑term: The modest EPS lift and the clean‑up of a cash‑draining asset should be priced in by the market now. Expect a 2–3 % upside in SB’s stock over the next 2‑4 weeks as analysts adjust earnings models and the cash‑position improves. A buy‑on‑dip at current levels (≈ $22‑$23) is justified if the price has already discounted the sale.
- Medium‑term: With the vessel removed, SB’s cost structure tightens, supporting a higher EPS trajectory and stronger free‑cash‑flow generation for 2026‑2028. This underpins a bullish bias toward the stock, especially if the broader dry‑bulk market remains in a supply‑constrained, rate‑supporting environment. Maintain a core long position with a target of $28‑$30 by the end of 2026, contingent on continued rate strength and no further asset‑write‑offs.