Is Rickmers worth buying? What about other shipping trusts?

Rickmers has just reported its profit plunges by 51% even though revenue improves by 14%. This shows that its expenses are growing faster than earnings and that it also has to pay compensations for the huge order cancellations (US$918.7m) by cash & interest-bearing convertible loan (US$64m in total).

This, in fact, is a good thing as Rickmers is biting the bullet and it no longer has to find ways to fund the humongous purchase. Lesson learnt here is never bite more than you can chew.  If Rickmers were to persist in the purchase, its loan-to-value (LTV) clause would be invoked and the loan interest would be revised upward and put Rickmers in dire straits.

However, the bad side to this is whether Rickmers will be able to deliver better revenue with its 16 container ships.  Shipping trusts like Rickmers have to constantly acquire more ships to increase its yield as most of the ships have already locked in chartering rates for the long terms (usually 7-10 years).

I, personally, would advise investors to jump ship and invest in Pacific Shipping as it has no LTV compared to Rickmers & First Ship.