Robert Bugbee: We have the fleet everybody wants
"We have the fleet that everybody wants," says CEO Robert Bugbee of Scorpio Bulkers.
This statement came yesterday, Wednesday, and the stalwart CEO of what is probably the world's most expansive shipping group at this time, Scorpio Bulkers and Scorpio Tankers, has been saying this ever since the ambitious plans were made just a few years ago.
Ever since the duo of Bugbee and Italian-born Chairman of Scorpio, Emanuele Lauro, launched the Scorpio project, the two men have repeatedly insisted that the carriers were destined to succeed, enjoying benefits that traditional carriers are unable to match: Scorpio was, without any detrimental baggage, able to order a new and energy efficient fleet at just the right time: In 2013, when the prices were at their lowest.
That was one of the arguments. The other has long been - and still is - that the Scorpio group is backed by a group of financial investors that any other shipping group would envy.
Easier to make money
Both arguments ring true, but regardless of these facts the dry bulk carrier is still getting closer and closer to the moment when the daily grind begins, and the carrier will have to start making money on its regular operations, even if Scorpio Bulkers' break even point is lower than its competitors'.
Robert Bugbee has never tried to hide the fact that he has more faith in Scorpio Tankers, which he describes as the "Beauty," whereas Scorpio Bulkers is the "Beast." Yesterday this daily grind began, to a certain extent, for Scorpio Bulkers, as Emanuele Lauro had to characterize 2014 as a disappointment to the Beast and "definitely below expectations," - and Robert Bugbee added, with his indomitable confidence, that 2015 will be the year where Scorpio Bulkers strikes.
Robert Bugbee has few simple business rules
Scorpio Bulkers lost USD 45 million in the first nine months of 2014, and some will say that the carrier's statements are starting to sound like the ones uttered by older carriers such as Lauritzen Bulkers or Norden - namely that the rebound did not come this year, but will probably come in 2015.
But the Manhattan-Monaco based carrier still argues that it is holding cards that will make all the difference:
"We have the fleet that everybody wants," said Robert Bugbee again at the teleconference on Wednesday.
40 of Scorpio Bulkers' new ships will be delivered in 2015, with a slightly lower number set for 2016, and the carrier maintains that the timing is right, adding that there are no signs that growth in the major growth nations such as China and India would indicate otherwise.
Major demand still in place
"China is seeing a record-high demand and we're seeing a broad demand for commodities, including palm oil, oil, steel, carbon... should I continue? There's nothing to indicate that we're moving into a recession," said Bugbee at the teleconference.
Scorpio frequently publishes statements about the deals being made with banks in Europe and Korea, as well as the export credit institutions financing the group's fleet expansion. A total of 19, the carrier stated yesterday, with three new on the way.
"A fantastic support."
As such, Bugbee believes that the market is about to be split in two:
Those with easy access to capital, and those struggling to secure capital. According to the Scorpio CEO, this will help consolidate the industry.
Robert Bugbee: Now comes the execution
Scorpio Bulkers has lost USD 45 million in 2014
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