Pacific Basin Shipping Limited · HKEX:2343
Pacific Basin Shipping — FY2005 Earnings Presentation
31 slides from Pacific Basin Shipping's earnings presentation, Mar 6, 2006
Slide 1: Results Presentation for the year ended 31st December 2005
S Pacific Basin Results Presentation}? For the year ended 31st December 2005
Slide 2: 2005 Highlights
2005 Highlights ! Profits – US$147.1 million (2004:$103.5million) ! Revenues – US$433.7 million (2004:$302.2million) ! Earnings per share US cents 11.58; HK cents 89.72 (2004: US cents 9.59, HK cents 74.30) ! 50 owned and chartered vessels in operation at year end (2004: 45) plus 10 on order (2004:
Slide 3: 2006 Outlook
2006 Outlook ! Market likely to remain firm but at lower levels than 2005 ! 2006 Handysize revenue days and contract cover now stand at Days Cover $/day 14,800 61% 14,400+ ! Newbuilding programme to expand fleet 20% over next 3 years ! Over US$300million of spending power (including leverage) for fu
Slide 4: Review
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Slide 5: The Baltic Dry Index
The Baltic Dry Index 7,000 6,208 6,000 5,681 5,000 4,000 2,668 3,000 2,622 2,000 1,747 1,000 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 5 Source: Bloomberg www.pacbasin.com 2343.HK
Slide 6: Dry Bulk – 1 year Time-Charter Rates
Dry Bulk – 1 year Time-Charter Rates US$/day Handysize Handymax Panamax Capesize 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Source: Clarkson's 6 www.pacbasin.com 2343.HK
Slide 7: Demand – China's Iron Ore Imports
Demand – China’s Iron Ore Imports 2006F : 25.8 Mil Tons/ Month (Clarkson’s estimate) 30 2005 average :22.9 25.4 25 22.7 2004 average :17.3 22.6 21.1 2003 average :12.4 20 19.0 16.9 17.8 2002 average : 15.7 15 9.3 12.8 12.7 12.5 11.4 10.7 9.1 9.5 10 7.9 5 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 8: World Fleet & Orderbook
World Fleet & Orderbook Existing Mil dwt Orderbook % of Existing Fleet Feb 348 86 Tanker 06 25% Feb 325 89 05 Other types Container Dry Bulk Feb 347 64 06 19% Feb 323 71 05 Feb 112 53 06 47% Feb 100 55 05 Feb 103 22 06 21% Feb 100 19 05 0 100 200 300 400 500 8 www.pacbasin.com 2343.HK
Slide 9: Drybulk Fleet & Orderbook
Drybulk Fleet & Orderbook Mil dwt Existing 2005 2006 2007 2008+ Orderbook Average Fleet (%) Age Panamax Capesize Feb 112 8 7 11 06 Feb 103 7 8 12 23% 11.1 05 Feb 94 8 9 5 06 23% 11.6 Feb 86 7 8 10 05 Handymax Feb 67 6 43 06 19% 11.3 Feb 61 6 5 5 05 1 1 Handysize Feb 36 1 8% 17.7 06 Feb 05 35 1 21 0
Slide 10: Dry Bulk Scrapping
Dry Bulk Scrapping DWT million Orderbook Fleet > 20 years 50 948% 45 40 35 30 26.1 25 102% 20.8 591% 20 61% 117% 15 12.2 10 4.8 5 3.2 0 Capesize Panamax Handymax Handysize Handysize 100K+ 60-100K 40-60K (10-40K) (25-35K) 10 www.pacbasin.com 2343.HK
Slide 11: Supply: Age Profile of Global Handysize Fleet
Supply: Age Profile of Global Handysize Fleet (within 25-35K segment) Dwt m >15 years old: 61% >25 years old: 27% 100 90 80 70 Order Book: 8% 60 Our Fleet Age 6 Years 50 40 30 20 10 0 11 <7676 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 0708+ Year www.pa
Slide 12: Summary
Summary ! Despite downward trend, rates were good all year ! Bigger ships suffered more than smaller ones ! Demand was very strong but new supply finally had an impact ! Expect 2006 to be a similar year of strong demand counter- balanced by growing supply ! Expect to see an increase in scrapping if
Slide 13: Business & Review
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Slide 14: Fleet: No. of Vessels
Fleet Owned Chartered Managed Newbuilding Handymax 70 60 60 4 50 4 50 45 4 10 Operating 4 10 No. of Vessels Operating 31 Lease 40 7 Lease 17 27 30 17 Finance Lease Finance Lease 6 20 33 23 10 17 17 1 2 2 0 Including 31 Dec 2004 31 Dec 2005 Newbuildings 14 www.pacbasin.com 2343.HK
Slide 15: Cargoes Carried
Cargoes Carried Ore Log & Forest 5% Products Other Bulks * 17% 15% Steel & Scrap Cement 5% 15% Salt 6% Concentrates Grains 8% 11% Fertilisers Coal & Coke 9% 9% * Includes Agriculture Products, Alumina, Soda Ash, Gypsum, Sands and other bulk products 15 www.pacbasin.com 2343.HK
Slide 16: Load Areas
Load Areas Asia Pacific Atlantic/Others FY 2005 - 75% (10.2mil mt) FY 2005 - 25% (3.4mil mt) '000 MT FY 2004 - 75% (8.0mil mt) FY 2004 - 25% (2.6mil mt) 4,000 2004 2005 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Australia West S.E. Asia New China Korea Japan South East CoastEurope Indian Africa Coast
Slide 17: Discharge Areas
Discharge Areas Asia Pacific Altantic/Others FY 2005 - 73% (10.0mil mt) FY 2005 - 27% (3.7mil mt) FY 2004 - 76% (8.2mil mt) FY 2004 - 24% (2.6mil mt) '000 MT 2005 2004 1,800 Front-hauls 1,600 Back-hauls 1,400 1,200 1,000 800 600 400 200 0 S.E. Asia Korea China Australia Japan West New South East Coa
Slide 18: Financial Review
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Slide 19: Results - Highlights
Results - Highlights FY 2005 FY 2004 Turnover (US$mil) 433.7 302.2 Net profit (US$mil) 147.1 103.6 Earnings per share (US cents) 11.58 9.59 Dividends (HK cents per share) 65.00 24.00 Payout ratio 73% 56% Handysize revenue days 14,200 9,900 Handysize TCE (US$/day) 17,100 17,900 19 www.pacbasin.com 23
Slide 20: Results - Analysis
Results - Analysis US$mil FY 2005 Reported net profit 147.1 Less net gains on disposal of vessels (23.5) Profit before disposal gains 123.6 Gains / (losses) arising from new accounting standards HKAS 39 Financial instruments 4.6 HKAS 16 Fixed assets 1.9 HKFRS 3 Goodwill not amortized 1.8 HKFRS 2 Sha
Slide 21: Dividends
Dividends ! Payout policy of not less than 50% of attributable profits ! Actual payout ratio has consistently exceeded the minimum dividend policy (per share) Year Dividend US$mil HK Cents Payout Ratio 2004 (A) Post listing 39.0 24 56% 2005 (A) Interim (paid 4 Oct 05) 49.5 30 Final (proposed) 57.9 3
Slide 22: Daily Vessel Costs
Daily Vessel Costs US$/day Finance cost Depreciation Opex Direct Overhead Charter-hire 10,000 8,850 9,000 660 7,640 7,820 8,000 6,810 4501 7,000 970 8601 6,000 2,750 5,000 2,420 4,000 8,1902 7,3702 3,000 2,420 2,260 2,000 1,000 1,270 1,500 0 FY04 FY05 FY04 FY05 Owned Chartered-in Vessel Days 8,070 1
Slide 23: Balance Sheet - Highlights
Balance Sheet - Highlights (US$mil) FY 2005 FY 2004 Net book value of fixed assets * 504.3 544.1 Gross borrowings 316.9 370.1 Cash 83.7 47.7 Net borrowings 233.2 322.4 Shareholder's equity 309.3 232.6 Net borrowings / Fixed assets 46% 59% Net borrowings / Shareholder's equity 75% 139% *Insured value
Slide 24: Cashflow - Highlights
Cashflow - Highlights US$mil 2005 2004 Operating cash inflows 173.3 130.2 Investing cash in/(out) flows 24.7 (273.2) - Payments for vessels (121.2) (274.4) - Sales of vessels (incl. charterbacks) 139.5 - - Others 6.4 1.2 Financing cash (out)/inflows (157.5) 178.9 - Net (repayment) / drawdown of bank
Slide 25: Capital & Lease Commitments
Capital & Lease Commitments US$mil At 31 December 2005 < 1 yr 2-5 yrs > 5 yrs Total Capital commitments 7 Vessels 50.0 108.9 - 158.9 Others 2.6 - - 2.6 Total commitments 52.6 108.9 - 161.5 Lease commitments Vessels chartered in 52.8 129.6 40.7 223.1 under operating leases 25 www.pacbasin.com 2343.HK
Slide 26: Investment Capacity
Investment Capacity Net = US$189m Potential vessel expenditures US$473 mil US$ m Proposal final -58 500 dividend 450 400 Potential bank Potential borrowings 350 163 284 borrowings on 300 existing fleet 250 Capital 200 commitments 84 150 Cash at 31 Dec 05 Cash 100 189 162 50 0 US$ m -60 -40 -20 0 20
Slide 27: Outlook & Prospects
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Slide 28: Earnings Cover: Vessel Revenue Days
Earnings Cover Unfixed 18,000 Fixed 15,600 days 16,000 14,800 days 14,200 days 14,000 Vessel Revenue Days 39% 81% 12,000 10,000 8,000 61% 6,000 Average Average 4,000 daily rate daily rate* 2,000 US$17,100 US$14,400+ 19% 0 2005 2006 2007 *Includes US$1,000/day as an estimate of the uplift to be achie
Slide 29: Strategic Direction
Strategic Direction ! Continue to build on core strengths: " Market leader in handysize with large, modern, uniform fleet " Freight services direct to blue chip customers " Efficient cargo execution to improve rates " Sound financial management " Strong dividend policy ! Expand the proven handysize
Slide 30: Summary
Summary ! 2005 was another excellent year for dry bulk shipping, allowing us to achieve record profits ! High asset prices restricted fleet expansion but we maintained our position as the leading operator of modern handysize tonnage ! Sale and charter back programme has provided financial strength a
Slide 31: Disclaimer
Disclaimer This presentation contains certain forward looking statements with respect to the financial condition, results of operations and business of Pacific Basin and certain plans and objectives of the management of Pacific Basin. Such forward looking statements involve known and unknown risks,
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