Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping — Q2 FY2021 Earnings Presentation
45 slides from Great Eastern Shipping's earnings presentation, Oct 29, 2020
Slide 1: The Great Eastern Shipping Co. Ltd.
The Great Eastern Shipping Co. Ltd.
Slide 2: Quarterly Results Updates – Q2FY21
The Great Eastern Shipping Co. Ltd. QUARTERLY RESULTS UPDATES – Q2FY21 29 October 2020
Slide 3: Forward-looking statements disclaimer
The Great Eastern Shipping Co. Ltd. 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, s
Slide 4: Financial Results Q2 FY 2020-21
The Great Eastern Shipping Co. Ltd. FINANCIAL RESULTS Q2 FY 2020-21 4
Slide 5: Reported Financial Highlights
The Great Eastern Shipping Co. Ltd. REPORTED FINANCIAL HIGHLIGHTS GE Shipping Q2FY21 consolidated Net Profit at 225 Rs. Crores Standalone Key Figures Consolidated Q2FY21 Q2FY20 H1FY21 (Amount in Rs. Crs) Q2FY21 Q2FY20 H1FY21 Income Statement 624 647 1580 Revenue (including other income) 802 855 1931
Slide 6: Normalized Financial Notes
The Great Eastern Shipping Co. Ltd. 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-
Slide 7: Normalized Financial Highlights
The Great Eastern Shipping Co. Ltd. NORMALIZED FINANCIAL HIGHLIGHTS GE Shipping Q2FY21 consolidated Normalized Net Profit at Rs. 134 Crores Standalone Key Figures Consolidated Q2FY21 Q2FY20 H1FY21 (Amount in Rs. Crs) Q2FY21 Q2FY20 H1FY21 Income Statement 624 647 1580 Revenue (including other income)
Slide 8: Normalized Financial Highlights
The Great Eastern Shipping Co. Ltd. NORMALIZED FINANCIAL HIGHLIGHTS Standalone Key Figures Consolidated Q2FY21 Q2FY20 H1FY21 Q2FY21 Q2FY20 H1FY21 Key financial figures 21.19% 10.62% 4.65% *Return on Equity (ROE) (%) 7.31% 3.68% 15.66% *Return on Capital Employed (ROCE) 14.64% 8.32% 6.49% 6.18% 6.47%
Slide 9: Performance Review
The Great Eastern Shipping Co. Ltd. PERFORMANCE REVIEW Break up of Revenue days (Shipping) Revenue Days Q2 FY21 Q2 FY20 Owned Tonnage 4,007 4,040 Inchartered Tonnage 9 7 Total Revenue Days 4,016 4,047 Total Owned Tonnage (mn.dwt) 3.70 3.85 Break up of Revenue days (Offshore) Revenue Days Q2 FY21 Q2
Slide 10: Revenue Visibility & Coverage
The Great Eastern Shipping Co. Ltd. REVENUE VISIBILITY & COVERAGE Category-wise coverage of operating days (Shipping) --- FY21 Extent of coverage of fleet’s Category Revenue Visibility operating days Crude Carriers 38% Product Carriers 22% LPG Carriers 70% Rs 339 Cr Dry Bulk 34% Category-wise covera
Slide 11: GESCO Standalone Debt Repayment Schedule
The Great Eastern Shipping Co. Ltd. GESCO STANDALONE DEBT REPAYMENT SCHEDULE (NEXT 5 YEARS) GESCO - Standalone (USD mn) 100 600 549 78 500 80 71 74 60 400 USD Million 60 USD Million 300 40 36 200 20 100 0 0 Sep-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Repayments Loan O/s (RHS) *Current outstanding excl
Slide 12: Fleet Profile
The Great Eastern Shipping Co. Ltd. FLEET PROFILE SHIPPING Fleet DWT Number of Ships Average Age (Yrs.) Crude Carriers 1,461,591 11 14.57 Product Carriers 987,207 17 13.02 Gas Carriers 224,260 5 17.64 Dry Bulk Carriers 1,026,462 13 8.03 Total 3,699,520 46 12.53 OFFSHORE Fleet Number of Units Average
Slide 13: Fleet Development
The Great Eastern Shipping Co. Ltd. FLEET DEVELOPMENT Sale & Purchase activities during Q2 FY21 Contracted to sell its Very Large Gas Carrier named ‘Jag Vidhi’ built in 1996 and delivered the same subsequent to the quarter Contracted to buy a secondhand Very Large Gas Carrier built in 2002 and took
Slide 14: The Great Eastern Shipping Co. Ltd.
The Great Eastern Shipping Co. Ltd.
Slide 15: Asset Price Movement - Shipping
The Great Eastern Shipping Co. Ltd. ASSET PRICE MOVEMENT - SHIPPING 15
Slide 16: Asset Price Movement (Indexed)
65 70 75 80 85 90 55 65 75 95 95 85 100 105 105 Jan-15 Jan-15 Apr-15 Apr-15 Jul-15 Jul-15 Oct-15 Oct-15 Jan-16 Jan-16 Apr-16 Apr-16 Jul-16 Jul-16 Oct-16 Oct-16 Sources: Industry Reports Jan-17 Jan-17 Apr-17 Apr-17 Jul-17 Jul-17 Oct-17 Oct-17 Jan-18 Jan-18 Capesize Apr-18 Suezmax Apr-18 Jul-18 Jul-18
Slide 17: Supply Side
The Great Eastern Shipping Co. Ltd. SUPPLY SIDE 17
Slide 18: Lowest Orderbook in 20 Years
The Great Eastern Shipping Co. Ltd. LOWEST ORDERBOOK IN 20 YEARS 50% 70% 60% 40% Historical 50% Average: 21% Historical 30% 40% Average: 24% 20% 30% 20% 6.5% 10% 10% 8.0% 0% 0% Crude tankers Orderbook (% of Total fleet) Product tankers Orderbook (% of Total fleet) 100% 50% 80% Historical 40% Average
Slide 19: Scrapping
The Great Eastern Shipping Co. Ltd. SCRAPPING Fleet Vessel (mn Dwt) Scrapping (% of beginning world fleet) Category 25 Oct 20 9MCY20 2019 2018 2017 2016 2015 2014 Crude 426 0.21% 0.61% 4.62% 2.35% 0.35% 0.23% 1.60% Product 163 0.26% 0.43% 1.64% 1.42% 0.62% 0.61% 1.19% Dry Bulk 908 1.23% 0.92% 0.54%
Slide 20: Aging Fleet High Scrapping Potential
The Great Eastern Shipping Co. Ltd. AGING FLEET HIGH SCRAPPING POTENTIAL Assets above 15 years as % of total fleet 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Crude Tankers Product Tankers Dry Bulk Age: 16-20 Years (% of Total Fleet) Age: >20 years (% of Total Fleet) 20 Source – Industry Reports
Slide 21: Supply Overhang in Short Term: Floating Storage of Oil
The Great Eastern Shipping Co. Ltd. HOWEVER, SUPPLY OVERHANG IN THE SHORT TERM FLOATING STORAGE OF OIL Crude Tankers 10k+ dwt (storage as % of fleet) Product Tankers 10k+ dwt (storage as % of fleet) 12.0% 10.0% Peaked on Peaked on 8-May-20 9.0% 8-May-20 10.0% 9.9% 8.8% 8.0% 8.0% 7.0% 6.0% 6.0% 5.0%
Slide 22: Congestion – Dry Bulk & LPG Carriers
The Great Eastern Shipping Co. Ltd. CONGESTION – DRY BULK & LPG CARRIERS FLEET HELD DUE TO CONGESTION HAS BEEN HIGHER Bulkers 18 – 20% of Bulker Fleet (Capesize and Panamax) was tied up due to congestion during the quarter as compared to a usual average of 12 – 14 % Gas (LPG) 7 – 10 % of VLGC Fleet
Slide 23: Demand Side - Shipping
The Great Eastern Shipping Co. Ltd. DEMAND SIDE - SHIPPING 23
Slide 24: Tanker Market
The Great Eastern Shipping Co. Ltd. TANKER MARKET
Slide 25: Crude Oil Seaborne Trade Impact
The Great Eastern Shipping Co. Ltd. CRUDE OIL SEABORNE TRADE IMPACT Y-O-Y % Change in Crude trade 15% 9% 10% 5% 2% 0% 0% -1% -5% -10% -6% -8% -10% -10% -15% -20% -17% Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 25 Sources: Industry Reports
Slide 26: Refined Products Seaborne Trade Impact
The Great Eastern Shipping Co. Ltd. REFINED PRODUCTS SEABORNE TRADE IMPACT Y-O-Y % Change in Refined Products trade 10% 5% 5% 0% -2% -1% -5% -10% -10% -11% -10% -11% -15% -13% -20% -21% -25% Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 kbpd: Thousand Barrels Per Day 26 Sources: Ind
Slide 27: Dry Bulk Market
The Great Eastern Shipping Co. Ltd. DRY BULK MARKET
Slide 28: Dry Bulk Markets
The Great Eastern Shipping Co. Ltd. Major Exporters - Iron ore/Coal/Grains (MMT,%) DRY BULK EuropeUK/Med 4% Others 5% Canada+US, Colombia 2% MARKETS 9% Argentina/S .America,… Australia 38% Commodity wise Break up of Brazil 14% Global DB demand (%) Indonesia 14% Minor Bulks Coal 28% S.Africa/Other Af
Slide 29: Global Drybulk Commodity Seaborne Trade Data
The Great Eastern Shipping Co. Ltd. GLOBAL DRYBULK COMMODITY SEABORNE TRADE DATA Absolute Inc/Dec YoY Global Commodity Trade Data - mt % Inc/Dec YoY (9MCY20-9MCY19) Iron Ore 35 3.0% Coal -95 -9.8% Grains 22 6.9% Minor Bulk -48 -4.3% Total Growth -87 -2.5% China Iron Ore trade growth has been 10.6% f
Slide 30: China & World Steel Production
The Great Eastern Shipping Co. Ltd. CHINA & WORLD STEEL PRODUCTION World Steel China Steel % Growth World % Growth China 2000 10% China Steel Production 1800 increased marginally by Steel Production (in Million tonnes) 4.5% in 9MCY2020 Y-O- 8% 1600 Y. Whereas, World Steel Production growth was 6% 14
Slide 31: Brazil Iron Ore Exports
The Great Eastern Shipping Co. Ltd. BRAZIL IRON ORE EXPORTS Total BR IO Exports 40 37 38 35 35 36 35 34 34 33 33 34 34 34 34 35 32 32 30 30 29 30 29 29 30 30 27 26 25 25 24 24 22 22 21 22 20 19 15 10 5 0 Dec-18 Dec-19 Jan-18 Feb-19 Feb-18 May-18 Jun-18 Jul-18 Jan-19 May-19 Jan-20 Jun-19 Jul-19 Feb-2
Slide 32: LPG (Gas) Market
The Great Eastern Shipping Co. Ltd. LPG (GAS) MARKET
Slide 33: LPG Seaborne Trade Data
The Great Eastern Shipping Co. Ltd. LPG SEABORNE TRADE DATA Y-o-Y VLGC Trade 20% 14% 15% 12% 10% 4% 5% 1% 0% -5% -5% -10% -15% -11% -15% -20% -19% -25% -21% Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Global VLGC Trade (YoY) 33 Source – Industry Reports
Slide 34: Greatship (India) Limited
The Great Eastern Shipping Co. Ltd. Greatship (India) Limited (a 100% subsidiary)
Slide 35: Offshore Business Fleet Profile
The Great Eastern Shipping Co. Ltd. OFFSHORE BUSINESS FLEET PROFILE Fleet Utilization Extent of coverage of fleet's operating days Current Owned Fleet Type Fleet Count (FY21) Jack Up Rigs (350ft) 4 90% Anchor Handling Tug cum Supply Vessels 8 64% (AHTSV) Multipurpose Platform Supply and Support 2 56
Slide 36: Offshore E&P Spending
The Great Eastern Shipping Co. Ltd. OFFSHORE E&P SPENDING The E&P spending after increasing marginally in 2019 is expected to decline by about 15-20% in 2020. The source has revised Offshore E&P spending higher across the years. 36 Source – Industry Reports
Slide 37: Key Points on Offshore Q3CY2020
The Great Eastern Shipping Co. Ltd. KEY POINTS ON OFFSHORE Q3CY2020 • The fall in oil price and Covid-19 impact on the world economy has stalled the recovery. Day Rates • Some regions have witnessed early terminations & renegotiations. As a result charter rates have again come under pressure. • Rigs
Slide 38: Global Fleet Supply Offshore
The Great Eastern Shipping Co. Ltd. GLOBAL FLEET SUPPLY OFFSHORE Fleet Profile Number Jackup Rigs PSVs + AHTSVs Current Fleet 524 3587 Orderbook 41 173 O/B to current fleet 7.8% 4.8% Total Scrapping since January 2016 (nos.) 96 334 No. of Vessels/Rigs more than 20/30 years old 38% 18% (as %age of fl
Slide 39: Vessels / Rigs Coming Up for Repricing
The Great Eastern Shipping Co. Ltd. VESSELS / RIGS COMING UP FOR REPRICING OFFSHORE Vessels Rigs NO. OF VESSELS / RIGS 4 4 4 3 2 1 1 1 1 1 1 0 0 0 0 0 H2 FY21 H1 FY22 H2 FY22 H1 FY23 H2 FY23 H1 FY24 H2 FY24 H1 FY25 39 Source – Industry Reports
Slide 40: GIL Standalone Debt Repayment Schedule
The Great Eastern Shipping Co. Ltd. GIL STANDALONE DEBT REPAYMENT SCHEDULE (NEXT 5 YEARS) USD Million USD Million 40
Slide 41: Key Valuation Metrics
The Great Eastern Shipping Co. Ltd. KEY VALUATION METRICS 41
Slide 42: Share Price to Consolidated Net Asset Value
The Great Eastern Shipping Co. Ltd. SHARE PRICE TO CONSOLIDATED NET ASSET VALUE 600 1 0.9 500 0.8 0.7 400 INR/Share 0.6 300 0.5 0.4 200 0.3 0.2 100 0.1 0 0 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 H1FY21 Consolidated NAV Share Price/Consol. NAV (RHS) 42
Slide 43: Market Capitalization Below Cash
The Great Eastern Shipping Co. Ltd. MARKET CAPITALIZATION BELOW CASH INR Crores 7,000 6,000 5,000 4,000 3,000 2,000 1,000 - FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 H1FY21 Market Cap Consolidated Cash & Cash Equivalent 43
Slide 44: Summary – Shipping & Offshore
SUMMARY – The Great Eastern Shipping Co. Ltd. SHIPPING & OFFSHORE Market Positives (Shipping): • Historically Low Orderbook • High Scrapping Potential (Except Gas) Market Negatives (Shipping): • Short Term Supply Overhang • Weak Fundamental Trade Demand Market Negatives (Offshore): • E&P Spends Sign
Slide 45: Thank You
The Great Eastern Shipping Co. Ltd. THANK YOU visit us at www.greatship.com 45
The Great Eastern Shipping — Q2 FY2021 Earnings Presentation on 6ix