Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping Company — FY2022 Earnings Presentation
49 slides from Great Eastern Shipping's earnings presentation, Jun 16, 2022
Slide 1: Cover letter to stock exchanges
Our Ref.: S/2022/JMT June 16, 2022 BSE Limited National Stock Exchange of India Limited 1st Floor, Phiroze Jeejeebhoy Towers, Exchange Plaza, 5th Floor, Plot No. C/1, Dalal Street, Bandra Kurla Complex, Bandra (East), MUMBAI – 400 001 Mumbai – 400 051 Dear Sir, We enclose copy of updated presentatio
Slide 2: Slide 2
Slide 3: Forward looking statements
Except for historical information, the statements made in this presentation constitute forward looking statements. These include statements regarding the intent, belief or current expectations of GE Shipping and its management regarding the Company’s operations, strategic directions, prospects and f
Slide 4: Investor Presentation FY2022
INVESTOR PRESENTATION FY2022 16 Jun 2022
Slide 5: Reported Financial Highlights
REPORTED FINANCIAL HIGHLIGHTS GE Shipping FY22 consolidated Net Profit at INR 630 Cr Declared second interim dividend of INR 5.40/Share (Total dividend declared of INR 9.90/Share for FY22) Standalone Key Figures Consolidated FY22 FY21 (Amount in INR Cr) FY22 FY21 Income Statement 2,966 2,893 Revenue
Slide 6: Normalized Financial Highlights
NORMALIZED FINANCIAL HIGHLIGHTS GE Shipping FY22 consolidated Net Profit at INR 656 Cr Declared second interim dividend of INR 5.40/Share (Total dividend declared of INR 9.90/Share for FY22) Standalone Key Figures Consolidated FY22 FY21 (Amount in INR Cr) FY22 FY21 Income Statement 2,966 2,893 Reven
Slide 7: Reported Financial Highlights (Q4)
REPORTED FINANCIAL HIGHLIGHTS Standalone Key Figures Consolidated Q4FY22 Q4FY21 (Amount in INR Cr) Q4FY22 Q4FY21 Income Statement 740 627 Revenue (including other income) 983 799 358 313 EBITDA (including other income) 453 338 186 144 Net Profit 189 49 Balance Sheet 10,969 10,845 Total Assets 13,969
Slide 8: Normalized Financial Highlights (Q4)
NORMALIZED FINANCIAL HIGHLIGHTS Standalone Key Figures Consolidated Q4FY22 Q4FY21 (Amount in INR Cr) Q4FY22 Q4FY21 Income Statement 740 627 Revenue (including other income) 983 799 302 260 EBITDA (including other income) 407 284 178 116 Net Profit 204 65 Balance Sheet 10,969 10,845 Total Assets 13,9
Slide 9: Normalized Financial Notes
NORMALIZED FINANCIAL NOTES 1) The impact of the exchange rate on foreign currency loans and current assets and liabilities, including cash and bank balances, has been removed 2) NCD & Currency Swap: • Funds raised through NCDs have been swapped into USD using INR-FCY swaps, thus creating synthetic f
Slide 10: Normalized Financial Highlights
NORMALIZED FINANCIAL HIGHLIGHTS Standalone Key Figures Consolidated FY22 FY21 FY22 FY21 Key financial figures 12.42% 15.08% **Return on Equity (ROE) (%) 8.33% 10.45% 8.94% 10.25% **Return on Capital Employed (ROCE) (%) 6.46% 7.63% 0.59 0.68 Gross Debt/Equity (x) 0.63 0.71 0.12 0.17 Net Debt/Equity (
Slide 11: Profit & Loss Statement Industry Format
PROFIT & LOSS STATEMENT INDUSTRY FORMAT Standalone INR Cr Consolidated FY22 FY21 FY22 FY21 2,798 2,642 Operating Revenue 3,472 3,302 723 571 Less : Direct Operating Expenses/Voyage Expenses 770 588 2,074 2072 Time Charter Equivalent (A) 2,702 2,714 48 86 Profit on sale of ships 53 86 135 165 Other I
Slide 12: Performance Review: Revenue Days
PERFORMANCE REVIEW Break up of Revenue days (Shipping) Revenue Days Q4 FY22 Q4 FY21 3,939 3,942 Owned Tonnage 59 13 Inchartered Tonnage 3,998 3,955 Total Revenue Days Total Owned Tonnage (mn.dwt) 3.57 3.51 Break up of Revenue days (Offshore) Revenue Days Q4 FY22 Q4 FY21 Offshore Logistics 1,508 1,50
Slide 13: Performance Review: Annual TCYs
PERFORMANCE REVIEW Average annual TCYs earned in various (Shipping) categories Average (TCY USD/day) FY22 FY21 Y-o-Y Change Crude Carriers 11,661 24,695 -53% Product Carriers 9,914 14,728 -33% LPG Carriers 27,594 28,186 -2% Dry Bulk 26,995 10,907 148% 12
Slide 14: Performance Review: Quarterly TCYs
PERFORMANCE REVIEW Average quarterly TCYs earned in various (Shipping) categories Average (TCY USD/day) Q4 FY22 Q3 FY22 Q-o-Q Change Q4 FY21 Y-o-Y Change Crude Carriers 15,051 12,098 24% 15,674 -4% Product Carriers 10,251 10,689 -4% 10,877 -6% LPG Carriers 26,107 28,609 -9% 27,731 -6% Dry Bulk 22,15
Slide 15: Changes in Standalone Net Asset Value
CHANGES IN STANDALONE NET ASSET VALUE (Y-O-Y) INR/SHARE 14
Slide 16: Buyback Updates
BUYBACK UPDATES Total Shares Bought Back 4,199,323 Amount Earmarked 225.00 Average Price (INR/Share) 316.21* (INR Cr) Taxation on Amount Amount Utilized (INR Cr) 132.79* 52.42 (INR Cr) Total Amount % of Equity Reduced 2.86% 277.42 Earmarked (INR Cr) Buyback tax on Utilized Maximum Buy Back 29.96 333
Slide 17: Revenue Visibility & Coverage
REVENUE VISIBILITY & COVERAGE Category-wise coverage of operating days (Shipping) --- FY23 Extent of coverage of Category Revenue Visibility fleet’s operating days Crude Carriers 10% Product Carriers 20% LPG Carriers 70% INR 744 Cr Dry Bulk 21% Category-wise coverage of operating days (Offshore) ---
Slide 18: GESCO Standalone Debt Repayment Schedule
GESCO STANDALONE DEBT REPAYMENT SCHEDULE (NEXT 5 YEARS) GESCO Standalone (USD mn) 120 600 104 100 500 509 80 81 80 74 400 60 USD mn USD mn 60 300 40 200 20 100 0 0 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26 Mar-27 Loan Repayments Loan O/S (RHS) GESCO: We have effective all-in USD cost of debt of less than 3
Slide 19: Fleet Profile
FLEET PROFILE SHIPPING Fleet (16-Jun-22) Committed Fleet DWT (FY22) No: Avg Age Capex/Sale Crude Carriers 1,058,499 8 14.21 Product Carriers 1,092,465 18 14.15 Sale: 1 MGC to be Gas Carriers 212,260 5 17.54 sold in H1FY23 Dry Bulk Carriers 1,210,805 14 9.07 Total 3,574,029 45 12.65 OFFSHORE Fleet Nu
Slide 20: Management Philosophy
MANAGEMENT PHILOSOPHY Focussed on the same business for 70+ years… Creating Superior Stakeholder Value Low balance sheet leverage; Sector Agnostic; High operating Value based approach leverage Maintain high cash not momentum balances; based Disciplined Use of Leverage Committed to health & Opportuni
Slide 21: Investment Thesis
INVESTMENT THESIS Fleet operated at global Offshore fleet – quality standards, with a large operations with low number of international balance sheet leverage customers Prudent Capital Allocation across a Strong cash flows diversified fleet Strong balance sheet High level of operating enables capaci
Slide 22: International standards / number of customers
International standards/ no. of customers Port State Control 54 inspections with nil 54 observations Total Inspection 66 Unplanned technical downtime FY22 – 0.46% o 78 inspections carried out by oil majors with an average of 2.74 observations per inspection In FY 22, we carried cargo for a total of
Slide 23: Prudent Capital Allocation
Prudent Capital Allocation Transformation from Momentum Buying to Value Buying Sales & Purchase (Oil Tankers) vs Suezmax 5 year old Purchase (DryBulk) Vs Panamax Drybulk 5 year old 90 105 Momentum Buying Momentum Buying 80 95 70 85 60 75 50 65 Value Buying Value Buying 40 55 30 45 20 35 10 Apr-06 Ap
Slide 24: Shipping Market
SHIPPING MARKET 23
Slide 25: Tanker Market
TANKER MARKET
Slide 26: Crude and Product Tankers
Crude and Product Tankers Avg. Suezmax Earnings (USD/day) Avg. MR Earnings (USD/day) 1,00,000 40,000 90,000 35,000 80,000 30,000 70,000 60,000 25,000 50,000 20,000 40,000 15,000 30,000 10,000 20,000 10,000 5,000 0 0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Slide 27: Crude and Product Tankers
Crude and Product Tankers Crude & product trade remained 6% & 4% below pre-COVID levels. In the same period, the crude and product tanker fleets have grown by almost 6% and 5% respectively Owing to these factors, freight rates remained very subdued until Feb-end. The onset of the Russia- Ukrai
Slide 28: Dry Bulk Market
DRY BULK MARKET
Slide 29: Dry Bulk
Dry Bulk DB Freight softened in Q4FY22 in line with seasonality, but Sub-Capes outperformed Capes Avg Baltic Capesize 5T/C Earnings (USD/day) Avg Baltic Supra Earnings BSI-58 10T/C 70,000 (USD/day) 50,000 60,000 50,000 40,000 40,000 30,000 30,000 20,000 20,000 10,000 10,000 - 0 Apr May June July Aug
Slide 30: Dry Bulk
Dry Bulk Dry bulk demand (in ton-miles) was marginally higher (+0.5%) in Q4FY22 led by longer distances. Total trade volume, however, was lower by about 1.8% yoy, primarily led by iron ore (weather disruptions (rains) in Brazil) and coal (Indonesian coal export ban in Jan ’22). On the other hand
Slide 31: LPG (Gas) Market
LPG (GAS) MARKET
Slide 32: Gas
Gas Avg. VLGC Earnings (USD/day) 1,20,000 1,00,000 VLGC Spot earnings sustained healthy levels during Q4 FY-22 but were lower YoY in comparison to Q4 80,000 FY-21. 60,000 40,000 20,000 - USD/day FY21 FY22 % change Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 12M 45,500 32,100 -29% FY 21 FY 22 31
Slide 33: Gas
Gas • VLGC spot earnings averaged USD 30,000 / day during Q4 FY-22 down 25 % YoY. • The drop in earnings was majorly attributed to a 60 % YoY increase in bunker prices (VLSFO). • Baltic LPG spot freight rates averaged marginally better than the corresponding period (USD 57 per ton versus USD 55 per
Slide 34: Fleet Supply
Fleet Supply
Slide 35: One of the Lowest Order Book to Fleet Ratios
One of the Lowest Order Book to Fleet Ratios Orderbook as % of Fleet 8% 6.83% 6.62% 7% 6% 4.98% 5% 4% 3% 2% 1% 0% Crude Tankers Product Tankers Dry Bulk 34 Sources: Industry Reports
Slide 36: Asset Price Movement
ASSET PRICE MOVEMENT 35
Slide 37: Asset Price Movement (Indexed)
100 110 120 130 90 75 95 115 135 May-17 May-17 Aug-17 Aug-17 Nov-17 Nov-17 Feb-18 Feb-18 May-18 May-18 Aug-18 Aug-18 Sources: Industry Reports Nov-18 Nov-18 Capesize Suezmax Feb-19 Feb-19 May-19 May-19 Aug-19 Aug-19 Nov-19 Nov-19 Feb-20 Feb-20 May-20 May-20 Over the Last 5 Years Aug-20 Aug-20 Nov-20
Slide 38: Scrapping
SCRAPPING Fleet Vessel (mn Dwt) Scrapping (% of beginning world fleet) Category May 22 Q1CY2022 CY2021 CY2020 CY2019 CY2018 CY2017 CY2016 CY2015 CY2014 Crude 438 0.31% 2.47% 0.53% 0.55% 4.39% 2.43% 0.39% 0.38% 1.75% Product 174 0.47% 2.11% 0.57% 0.60% 1.72% 1.22% 0.54% 0.62% 1.10% Dry Bulk 953 0.11%
Slide 39: Greatship (India) Limited
Greatship (India) Limited (a 100% subsidiary)
Slide 40: Fleet Supply: Increasing number of Cold Stacked Rigs
Fleet Supply Increasing number of Cold Stacked Rigs Number Jackup Rigs PSVs + AHTSVs Current Fleet 488 3,515 Contracted Fleet 350 2,157 Orderbook 28 132 O/B to current fleet 5.7% 3.8% Total Scrapping since January 2016 (nos.) 141 507 No. of Vessels/Rigs more than 20/30 years 33% 19% old (as %age of
Slide 41: Market Trends: Utilisation
200 250 300 350 400 450 Apr 2010 Sep 2010 Feb 2011 Jul 2011 Dec 2011 May 2012 Oct 2012 Mar 2013 Aug 2013 Jan 2014 Jun 2014 Market Trends: Utilisation Nov 2014 Apr 2015 Under Contract Sep 2015 Feb 2016 Jul 2016 Dec 2016 May 2017 Oct 2017 Mar 2018 Aug 2018 Total Utilisation (RHS) Jack up utilisation:
Slide 42: Repricing
Repricing Vessels Rigs 6 4 4 2 1 1 1 1 1 0 0 0 H1 FY23 H2 FY23 H1 FY24 H2 FY24 H1 FY25 H2 FY25 One JU Rig has received LOA for next contract after completion of the existing contract. It comes for repricing only in H2FY26 41
Slide 43: Greatship Debt Repayment Schedule
GREATSHIP DEBT REPAYMENT SCHEDULE (NEXT 3 YEARS) GIL (USD Mn) 120 180 97 160 100 159 140 80 120 USD mn USD mn 100 60 80 40 36 60 25 40 20 20 0 0 Mar-22 Mar-23 Mar-24 Mar-25 Repayments Loan O/S (RHS) 42
Slide 44: Greatship Evolution: The Last 7 Years
GREATSHIP EVOLUTION: THE LAST 7 YEARS • Most challenging years for the offshore sector since the late 80s. • Utilization levels across asset classes dropped to historic lows, charter rates came down to levels that barely generated any +ve EBIDTA. • Large part of the industry went through financial r
Slide 45: Initiatives on Environment
INITIATIVES ON ENVIRONMENT • Voluntarily published our first Environment Social Governance (ESG) report • Established a working group for feasibility study on alternate fuels and fuel optimisation technologies in view of the IMO emission reduction targets. • After the Jan 2020 IMO mandate on switchi
Slide 46: Financials
FINANCIALS 45
Slide 47: Counter Cyclical Investments have Generated Strong Cash Flows
Counter Cyclical Investments have Generated Strong Cash Flows 6 Year Cycle Net Debt Expansion Net Debt Reduction 400 0.60 Phase Phase 350 0.50 300 0.40 250 USD mn 200 0.30 150 0.20 100 0.10 50 - - FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 Net Debt Net Debt to Equity 46
Slide 48: Share Price to Consolidated NAV
Share Price to Consolidated NAV Share Price to Consolidated NAV 800 1 700 0.9 0.8 600 INR/Share 0.7 500 0.6 400 0.5 300 0.4 0.3 200 0.2 100 0.1 0 0 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Consolidated NAV Standalone NAV Share Price/Consol. NAV (RHS) * For FY22 we have taken share price as on 14th June 20
Slide 49: Thank You
THANK YOU visit us at www.greatship.com 48
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