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Global OSV fleet has a Discounted Cash Flow value 2.5 times higher than its Market Value
VesselsValue (VV), the world’s leading online valuation provider, is launching daily Discounted Cash Flow (DCF) valuations for Offshore Support Vessels (OSVs). This new valuation type looks to increase
VesselsValue’s Offshore coverage: VV currently provides daily updated market and demolition values for Offshore Support Vessels (AHTs, AHTS’ and PSVs) and MODUs (including Drillships, Semi- submersibles and Jackups).
The global OSV fleet’s DCF value is currently 2.5 times higher than its market value, today valued at $79.9 billion and $30.9 billion respectively.
By comparing DCF values to Market values, customers of VesselsValue can look for buy/sell/hold signals. For instance, if you can purchase a vessel when the market value is lower than the DCF value, you could potentially earn more money over the course of its lifetime than you spent. Therefore, this is a buy signal.
On the other hand, if the DCF value is lower than its market value, this implies you can sell the vessel for more than it will earn you for the rest of the vessel’s life.
For example, the Standard Viking was bought by Standard Drilling on the 19th January 2017 for $13 million. The day before the sale VesselsValue was providing the large PSV with a market value of $10.1 million and a DCF value of $29.4 million. This meant that, based on VV’s assumptions, the Standard Viking has the potential to earn double the amount Standard Drilling spent on the vessel.
Methodology for Discount Cash Flow Valuations
The VV DCF valuation module calculates the long term value of each asset by calculating the discounted cash flow for every individual vessel for each year of its remaining life. Focusing on the revenue, cost, commission and other factors provided by VV, these assumptions are vessel specific to reflect the differences in earning potential and running costs for vessels of the same type but of different specification and quality.
VesselsValue currently also offers DCF values for cargo vessels types (tanker, bulker, container, gas vessels) and customers will be able to modify the assumptions and add fixed charters to calculate custom DCF values.
About VesselsValue
Launched in 2011 by Richard Rivlin, a ship broker with 40 years of buying and selling experience, VesselsValue provides daily and automated Market, Demolition and Discounted Cash Flow Valuations for each vessel based on its individual specifications and the daily market movements.
The idea for VesselsValue came about during the financial crash of 2008, when traditional valuation methods were withdrawn from the market. Richard saw the need for data driven values and started work on the original maths behind the system. After three years of collecting the VV proprietary databases, VesselsValue was launched.
Today VV has 4 offices – London, Isle of Wight, Stoke and Singapore, employing over 90 people in roles ranging from collecting and processing individual vessel specifications, building up the GIS infrastructure on VV@ as well as a team of analysts monitoring the daily market valuations. VV is used by the world’s leading commercial and investment banks, private equity, funds, shipowners
and operators, lawyers, accountants and brokers.
“VV DCF will revolutionise the offshore space, allowing investors to make informed decisions on asset play. It will also provide owners and banks with alternative measures of value during the current downturn in market values.”
