Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping Company — Investor Presentation (June 2020)
57 slides from Great Eastern Shipping's investor presentation, Jun 8, 2020
Slide 1: Business Overview
BUSINESS OVERVIEW 8 June 2020
Slide 2: Company’s
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 3: Corporate Profile
CORPORATE PROFILE Offshore Shipping (Bulk) (Through wholly-owned subsidiary Greatship (India) Limited) Tankers • Crude Dry Bulk Logistics Drilling • Products/LPG India’s largest private sector shipping company over 71 years of experience 3
Slide 4: Shareholding Pattern
FII/FPI 22% Promoters 29% Govt./FI SHAREHOLDING 22% PATTERN Public 21% Shareholding Pattern as on 31 March 2020 4
Slide 5: Fleet Profile
SHIPPING FLEET Fleet DWT Number of Ships Average Age (Yrs.) PROFILE Crude Carriers 1,461,591 11 14.16 Product Carriers 987,207 17 12.60 Gas Carriers 224,113 5 18.73 Dry Bulk Carriers 1,026,462 13 7.61 Total 3,699,373 46 12.20 OFFSHORE Fleet Number of Units Average Age (Yrs.) Jack Up Rigs 4 8.64 Plat
Slide 6: Shipping Fleet Break-up
SHIPPING FLEET BREAK-UP 14 Product Tankers 12 12 10 Dry Bulk Crude Tankers 8 7 6 6 5 LPG Tankers 5 4 4 3 2 2 1 1 0 6
Slide 7: Business Philosophy
BUSINESS PHILOSOPHY
Slide 8: 4 Keys to Our Success
4 KEYS TO OUR SUCCESS In-House Dynamically Strong Diversified technical & managing balance Fleet commercial cycles sheet management 8
Slide 9: Net Debt/Equity & Total Capital Employed (Consolidated)
NET DEBT/EQUITY & TOTAL CAPITAL EMPLOYED (CONSOLIDATED) USD Mn 3,000 0.80 0.70 2,500 0.60 2,000 0.50 1,500 0.40 0.30 1,000 0.20 500 0.10 - 0.00 FY1993 FY1994 FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY
Slide 10: Dividend/Share (30+ Years Continuous Dividend)
- 2.00 4.00 6.00 8.00 16.00 10.00 12.00 14.00 INR/Share FY1991 FY1992 FY1993 FY1994 FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY2001 DIVIDEND/SHARE FY2002 FY2003 Dividend/Share FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 Dividend Yield (RHS) FY2013 FY2014 FY2015 FY2016 FY2017 (30+
Slide 11: ROE & ROCE (Consolidated)
ROE & ROCE (CONSOLIDATED) 45% 40% Average ROCE: 12% 35% Average ROE: 18% 30% 25% 20% 15% 10% 5% 0% ROCE (Consolidated) ROE (Consolidated) Average ROCE Average ROE 11
Slide 12: BWTS & Scrubber Installation Schedule
BWTS & SCRUBBER INSTALLATION SCHEDULE 40 35 35 30 No. of Vessels 25 20 15 12 9 9 10 7 7 4 4 5 2 0 Installed To be Installed CY2020 CY2021 CY2022 CY2023+ BWTS Scrubber • Total 9 Vessels have been fitted with BWTS and 35 vessels are scheduled to be installed with BWTS • 2 Vessels have been fitted with
Slide 13: Shipping Market
SHIPPING MARKET
Slide 14: Impact of COVID-19
IMPACT OF COVID-19
Slide 15: Impact of COVID-19 on Shipping
IMPACT OF COVID-19 ON SHIPPING Operational Disruptions due to COVID-19 • Drydocks, Ballast Water Treatment system installations, Scrubber Installations – Delays & Postponements • Shipyards & Newbuilding – Shortage of labour, repair delays, Vessel Delivery delays, supervision issues • Ship Demolition
Slide 16: Crude Oil Demand & Supply Impact
CRUDE OIL DEMAND & SUPPLY IMPACT Crude Oil Demand y/y change (kbpd) Jan-20 Feb-20 Mar-20 Apr-20 May-20 (855) (4,201) (4,062) (14,400) (15,501) Crude Oil Supply y/y change (kbpd) Jan-20 Feb-20 Mar-20 Apr-20 May-20 (198) (562) (243) (254) (7,893) kbpd: Thousand Barrels Per Day 16 Sources: Industry Rep
Slide 17: Decline in Core Products Demand During Jan-May 2020
DECLINE IN CORE PRODUCTS DEMAND DURING JAN-MAY 2020 Product-wise fall in demand (%) y/y decline in demand - key regions (%) Jan-20 Feb-20 Mar-20 Apr-20 May-20 -3% -1% -4% -3% -2% -4% -4% -3% -6% -9% -3% -12% -7% -13% -11%-15% -14% -20% -16% -16% -13% -19% -19% -21% -23% -23% -26% -29% -30% -30% -30%
Slide 18: Brent Oil Price Collapsed Significantly Before OPEC Supply Cut
BRENT OIL PRICE ($/BBL) COLLAPSED SIGNIFICANTLY BEFORE OPEC SUPPLY CUT Brent Prices ($/bbl) Brent Prices ($/bbl) 80 90 58.89 65.2 70 80 60 70 64 50 60 40 53 40 50 In March, OPEC+ 30 failed to reach an 40 40 agreement on production cuts 34 20 20 30 10 20 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Slide 19: Oil Contango vs. Floating Storage of Oil
OIL CONTANGO Vs. FLOATING STORAGE OF OIL During March-April’20, Oil Contango was above the floating storage cost economics therefore increase in floating storage demand. While in May 2020, Oil Contango narrowed, hence floating storage also lowered. 19 Sources: Industry Reports
Slide 20: Sample Day of Super Contango – 21st April 2020
SAMPLE DAY OF SUPER CONTANGO – 21st April 2020 Contango ($/bbl) Contango vs. Floating Storage Costs 42 30.0 38 36 36 36 37 37 25.0 34 35 35 35 34 20.0 34 31 32 33 30 12.9 29 15.0 30 28 26 10.0 26 9.4 23 5.0 22 19 0.0 NOV20 NOV21 JUL20 JUL21 MAR21 SEP20 SEP21 JAN21 MAY21 18 JUN20 OCT20 FEB21 APR21 JU
Slide 21: Historical Floating Storage Positively Correlated to Freight
HISTORICAL FLOATING STORAGE POSITIVELY CORRELATED TO FREIGHT 21 Sources: Industry Reports
Slide 22: Supply & Demand Disruptions Dry Bulk
SUPPLY & DEMAND DISRUPTIONS DRY BULK Annual Export Output Impacted Countries – Dry Bulk Iron Ore – Brazil, South Africa, Canada, India & Peru Met Coal – Mongolia & USA Thermal Coal – South Africa, Columbia, Indonesia & USA Grains – No Impact, Essential Commodities Nickel Ore – Philippines & Indonesi
Slide 23: Tanker Market
TANKER MARKET
Slide 24: Factors Affecting Freight Market
FACTORS AFFECTING FREIGHT MARKET 24
Slide 25: Global Crude Oil Demand & Supply Break-up (Region Wise)
GLOBAL CRUDE OIL DEMAND & SUPPLY BREAK-UP (REGION WISE) Crude Oil Demand Crude Oil Supply North America Asia Africa 23% 37% 9% N. America 23% Latin Middle America East S. America 5% 31% 7% Europe 16% FSU FSU APAC 17% Africa 9% 2% 8% Middle East 9% Europe 4% North America Latin America Europe N. Amer
Slide 26: Key Points on Tanker Market
KEY POINTS ON TANKER MARKET Asset •VLCC 5 yr old asset prices increased about 12% Y-O-Y Q1CY20 Prices •Suezmax 5 yr old asset prices increased about 8% Y-O-Y Q1CY20 Freight •BCTI averaged 5% over Q4CY19 & BDTI averaged 6% below Q4CY19 during Q1CY20 Rates •U. S. production was up about 1.05 million b
Slide 27: Tankers – Asset Price Movement (5-Year Old)
TANKERS – ASSET PRICE MOVEMENT (5-YEAR OLD) VLCC Suezmax Aframax VLCC Suezmax Aframax 100 90 90 80 Ship Price (in million $) Ship Price (in million $) 80 70 70 60 60 50 50 40 40 30 30 20 20 10 0 10 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2018 2018 2018 2018 2019 2019 2019 2019 2020 Wet Bulk asset prices has im
Slide 28: Baltic Dirty & Clean Index
BALTIC DIRTY & CLEAN INDEX BALTIC DIRTY TANKER INDEX 2,100 1,900 1,700 1,500 1,300 1,100 900 700 500 300 BALTIC CLEAN TANKER INDEX 2,300 1,800 1,300 800 300 258 Source – Industry Reports
Slide 29: Baltic LPG Assessment
100 120 140 160 0 40 60 80 20 $/Tonne May-15 Jul-15 Sep-15 Nov-15 Sources: Industry Reports Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Ref, Ras Tanura – Chiba (Japan) Sep-18 Nov-18 Jan-19 Mar-19 BALTIC LPG ASSESSMENT (LPG Fully May
Slide 30: Total Oil Supply & Demand
TOTAL OIL SUPPLY & DEMAND Supply Demand Refinery Throughput (RHS) 103 87 million barrels per day million barrels per day 101 85 99 83 97 95 81 93 79 91 77 89 87 75 85 73 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2015 2016 2017 2018 2019 2018 2018 2018 2018 2019 2019 2019 2019 2020 In Q1CY20 Y-O-Y, refinery through
Slide 31: Oil Products & Residual Fuel Demand Growth
OIL PRODUCTS & RESIDUAL FUEL DEMAND GROWTH In Q1CY2020, Core refined products demand growth was negative by approx. 5 mbpd ( 2 mbpd in light distillate & 3 mbpd in middle distillate) In Q1CY2020, Residual fuel demand growth was negative by approx. 0.4 mbpd Kindly Note: mbpd stands for million barrel
Slide 32: Refinery Margins
REFINERY MARGINS Refinery Margins were substantially down (ending quarter with 5 yr lows) across the globe, especially Asia it was at 5 yr lows for entire Q1CY20. Gasoline & Jet cracks were worst impacted. 352 Source – Industry Reports
Slide 33: Crude Oil Imports (US & China)
CRUDE OIL IMPORTS (US & China) 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 9,000 12,500 8,500 11,500 China Crude Oil total Imports (‘000 bpd) US Crude Oil total Imports (‘000 bpd) 8,000 10,500 7,500 9,500 8,500 7,000 7,500 6,500 6,500 6,000 5,500 5,500 4,500 3,500 5,000 Jan Feb Mar A
Slide 34: Crude Oil Exports (US)
CRUDE OIL EXPORTS (US) 2020 2019 2018 2017 2016 US Crude Oil total Exports (‘000 bpd) 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct* Nov Dec YTD2020, US exported 22% higher crude oil than YTD2019 34 Sources: Industry Reports
Slide 35: US LPG Exports of Propane, Propylene, Butane & Iso Butane
US LPG EXPORTS OF PROPANE, PROPYLENE, BUTANE & ISO BUTANE 100% 80% 60% 40% 20% 0% -20% US LPG Exports of Propane & Propylene (y-o-y growth in %) US LPG Exports of Butane & Iso Butane (y-o-y growth in %) US VLGC exports grew by 25% in Q1CY2020 Y-O-Y 35 Sources: Industry Reports
Slide 36: World Fleet Growth Crude Tankers
WORLD FLEET GROWTH CRUDE TANKERS Tanker Fleet - mn Dwt 1-Jan-18 1-Jan-19 1-Jan-20 22-May-20 VLCC 225.10 227.42 247.33 252.57 Suezmax 80.60 81.86 85.00 89.23 Aframax 67.20 67.07 70.13 73.61 Total (80k+)* 378.90 381.69 408.06 421.09 *Includes panamax crude tankers Order Book (mn Dwt) 2020 2021 2022+ T
Slide 37: World Fleet Growth Product Tankers & VLGC
WORLD FLEET GROWTH PRODUCT TANKERS & VLGC Product Fleet - mn Dwt 1-Jan-18 1-Jan-19 1-Jan-20 22-May-20 LR2 36.60 37.9 40.7 41.63 LR1 26.51 26.9 27.9 28.01 MR/Handy (35k+) 82.40 83.3 86.8 88.37 Total (35k+)* 147.61 150.93 158.65 161.37 *Suezmax Product Tankers included Order Book(mn Dwt) 2020 2021 202
Slide 38: Dry Bulk Market
DRY BULK MARKET
Slide 39: Dry Bulk Markets
DRY BULK Major Exporters - Iron ore/Coal/Grains (MMT,%) EuropeUK/Med 4% MARKETS Canada+US, Colombia 2% Others 5% 9% Argentina/S Commodity wise Break up of .America,… Australia 38% Global DB demand (%) Brazil 14% Minor Indonesia 14% Bulks Coal 28% 39% S.Africa/Other Africa 5% Russia 6% Major Importer
Slide 40: Key Points on Dry Bulk Markets
KEY POINTS ON DRY BULK MARKETS • Capesize 5 yr old asset prices were down 13% in Q1CY2020 Y-O-Y Asset • Panamax & Supramax 5 yr old asset prices were flat to marginally down in Q1CY2020 Y- Prices O-Y Freight • BDI hits 393 on 14-May-20, 80% down from multi year high of 2,518 on 04-Sep-19 Rates • In
Slide 41: Bulker Asset Prices
BULKER ASSET PRICES 5-YEAR OLD Capesize Panamax Supramax Capesize Panamax Supramax 70 40 60 35 Ship Price (in million $) Ship Price (in million $) 30 50 25 40 20 30 15 20 10 10 5 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2018 2018 2018 2018 2019 2019 2019 2019 2020 Capesize asset prices were down 13% in Q1CY20
Slide 42: Baltic Dry Index
BALTIC DRY INDEX 2,650 80% fall 2,450 from the 2,250 Vale’s Dam peak 2,050 Incident 1,850 1,650 1,450 1,250 1,050 850 650 450 250 Aug-15 Nov-15 Feb-15 May-15 May-16 May-17 May-20 Feb-16 Aug-16 Nov-16 Feb-17 Aug-17 Nov-17 Feb-18 May-18 Aug-18 Nov-18 Feb-19 May-19 Aug-19 Nov-19 Feb-20 Baltic Dry Index
Slide 43: China Iron Ore & Steel Production
CHINA IRON ORE & STEEL PRODUCTION World Steel China Steel % Growth World % Growth China 2000 12% 1800 Steel Production (in Million tonnes) 10% 1600 1400 8% 1200 6% 1000 China Steel Production 800 4% 600 2% increased marginally 400 1.2% in Q1CY2020 Y-O-Y 0% 200 0 -2% 2016 2017 2018 2019 Q1CY19 Q1CY20
Slide 44: China Coal Imports
CHINA COAL IMPORTS China coal imports change (Y-O-Y) Mn Tonnes 20.0 15.0 10.0 5.0 0.0 -5.0 -10.0 -15.0 454 Source – Industry Reports
Slide 45: World Fleet Growth Dry Bulk
WORLD FLEET GROWTH DRY BULK Fleet - Mn Dwt 1-Jan-18 1-Jan-19 1-Jan-20 22-May-20 Capesize 324 335 348 354 Panamax 202 207 218 223 Handymax 196 201 208 212 Handysize 96 98 100 105 Total 818 841 875 893 Orderbook 2020 2021 2022 2023+ Total (mn Dwt) Orderbook 3.9% 3.3% 0.9% 0.0% 8.1% (%Fleet) Slippage A
Slide 46: Scrapping
SCRAPPING Fleet Vessel (mn Dwt) Scrapping (% of beginning world fleet) Category 22 May 20 Q1CY20 2019 2018 2017 2016 2015 2014 Crude 421 0.03% 0.61% 4.62% 2.35% 0.35% 0.23% 1.60% Product 161 0.24% 0.43% 1.64% 1.42% 0.62% 0.61% 1.19% Dry Bulk 893 0.57% 0.92% 0.54% 1.77% 3.67% 4.03% 2.25% Scrapping wa
Slide 47: Greatship (India) Limited
Greatship (India) Limited (a 100% subsidiary)
Slide 48: Offshore Business Fleet Profile
OFFSHORE BUSINESS FLEET PROFILE Fleet Utilization Current Owned Fleet Extent of coverage of Fleet Count Category fleet's operating Type days (FY21) Jack Up Rigs (350ft) 4 PSV 100% Platform Supply Vessels (PSV) 4 Anchor Handling Tug cum ROVSV 89% 8 Supply Vessels (AHTSV) AHTSV 78% Multipurpose Platfo
Slide 49: Key Points on E&P Markets
KEY POINTS ON E&P MARKETS Q1CY2020 • The steep fall in oil price and Covid-19 impact on the world economy has stalled the recovery. Some regions have witnessed early terminations & renegotiations. Day Rates • We have not yet seen this impact in Indian market as there is no new price discovery since
Slide 50: Offshore E&P Spending
OFFSHORE E&P SPENDING The E&P spending after declining marginally in 2018 was flattish in 2019. Spending in 2020 is expected to decline from 2019 levels. Source – Industry Reports 50
Slide 51: Offshore E&P Spending
OFFSHORE E&P SPENDING 2020 estimated Capex cuts announced by industry players. Aggregate cuts is about 25% 51 Source – Industry Reports
Slide 52: Global Fleet Supply Offshore
GLOBAL FLEET SUPPLY OFFSHORE Fleet & Orderbook Number Jackup Rigs AHTSVs PSV Current Fleet 524 1980 1610 Orderbook 46 67 113 O/B to current fleet 8.8% 3.38% 7.02% • CY2019 actual deliveries have been far lower than scheduled. Due to bleak employment scenario owners have refrained from taking deliver
Slide 53: Financial Results FY 2019-20
FINANCIAL RESULTS FY 2019-20 53
Slide 54: Financial Highlights
FINANCIAL HIGHLIGHTS GE Shipping FY20 consolidated Net Profit at Rs. 207 Crores Declared 2nd interim dividend of Rs. 2.70 per share (Total dividend declared of Rs. 8.10 per share for FY20) Standalone Key Figures Consolidated FY20 FY19 (Amount in Rs. Crs) FY20 FY19 Income Statement 3,168.90 2,913.41
Slide 55: Financial Highlights
FINANCIAL HIGHLIGHTS Standalone Key Figures Consolidated FY20 FY19 FY20 FY19 Key financial figures 35.15% 29.68% EBITDA Margin 36.17% 35.22% 8.08% -0.14% *#Return on Equity (ROE) 5.99% 1.61% 8.15% 3.60% *#Return on Capital Employed (ROCE) 6.90% 4.25% 0.71 0.81 Gross Debt/Equity Ratio 0.78 0.88 0.26
Slide 56: Financial Highlights
FINANCIAL HIGHLIGHTS Breakup of Revenue Days Revenue Days Q4 FY20 Q4 FY19 Owned Tonnage 4,073 4,278 Inchartered Tonnage - 105 Total Revenue Days 4,073 4,383 Total Owned Tonnage (mn.dwt) 3.70 3.90 Average TCY Details Mix of Spot & Time Average (TCY $ per day) Q4’FY20 Q4’FY19 % Change Days (in %) Q4’F
Slide 57: Thank You
THANK YOU THANK YOU visit us at www.greatship.com 57
The Great Eastern Shipping Company — Investor Presentation (June 2020) on 6ix