Pacific Basin Shipping Limited · HKEX:2343

Pacific Basin Shipping — Q1 2014 Earnings Presentation

31 slides from Pacific Basin Shipping's earnings presentation, Apr 15, 2014

  1. Slide 1: First Quarter Trading Update

    2014 First Quarter Trading Update 15 April 2014

  2. Slide 2: 2014 First Quarter Highlights

    2014 First Quarter Highlights Pacific Basin Dry Bulk  PB Handysize vessel earnings at US$10,390/day  Outperformed the weak first quarter spot market (avg. US$9,470/day net)  Handymax daily earnings reflect our large seasonal programme of low-paying positioning voyages to benefit from higher payin

  3. Slide 3: Pacific Basin Dry Bulk – Earnings Coverage

    Pacific Basin Dry Bulk – Earnings Coverage As at 7 Apr 2014 2Q-4Q Uncovered PB Dry Bulk Fleet Development 2Q-4Q Covered Average number of ships operated Q1 Completed Handysize Handymax 230 15,160 40,050 184 2 Revenue Days Revenue Days 34,010 73 Revenue Days 11,200 Revenue Days 2Q-4Q 2Q-4Q 52% 2Q-4Q

  4. Slide 4: Dry Bulk Market Information

    Dry Bulk Market Information  Indices were improved compared to 1Q13, but freight rates declined from end 2013 and weakened further into 2Q  Strong increase in secondhand ship prices with freight earnings lagging asset value appreciation  Freight market was characterised by:  Imbalances in demand

  5. Slide 5: Dry Bulk Demand

    Dry Bulk Demand Dry Bulk Effective Demand Chinese Minor Bulk Imports Million tonnes % change YOY YTD imports have 30 Increased 27% YOY 16 25 12 9.7 20 8.7 7.3 15 8 10 4 5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 0 2014 2013 2012 2011 These 7 commodities make up over one third of the cargo vol

  6. Slide 6: Global Dry Bulk Fleet Development

    Global Dry Bulk Fleet Development net fleet growth Handysize Dry Bulk overall Handysize Age Profile (25,000-39,999 dwt) 2,207 vessels (71m dwt) 1Q14 +1.1% +1.7% YOY +2.1% +5.5% 25+ years 14% Dry bulk net fleet growth: 11%  Driven by 15.5m tonnes of new capacity in 1Q14 after 42% shortfall 0- 15 yea

  7. Slide 7: Dry Bulk Orderbook

    Dry Bulk Orderbook Handysize Orderbook 418 vessels (15m dwt) m Dwt 9.3%  Dry bulk orderbook reached its lowest of 18% in Aug 2013 7 6 7.4%  Current orderbook: 22% 5  New orders generally not possible for deliveries before: 4 43% 4.6% Shortfall  2017 in Japan 3 3.5% 2 2.0%  2016 in China 1 0 Ord

  8. Slide 8: Pacific Basin Dry Bulk – Outlook

    Pacific Basin Dry Bulk – Outlook  China’s continued strong demand for minor  Shipowner optimism resulting in less scrapping bulks despite slower economic growth and increased vessel ordering  Increased overseas mining output and lower  Credit squeeze in China leading to slower commodity prices e

  9. Slide 9: PB Towage – 1Q14 Performance

    PB Towage – 1Q14 Performance Harbour Towage PB Towage Fleet: 51 vessels (as at 15 April 2014)  +18% YOY increase in PB Towage job numbers in Australian ports despite disruptive cyclone season  Steadily expanding volumes and market share in Newcastle Offshore Towage  Continue to seek contract rene

  10. Slide 10: Towage Segment Operating Performance Before Overheads

    Towage Segment Operating Performance Before Overheads As at 31 December 2013 Towage Operating Performance US$m % 60 20 US$ million 2013 55.1 18 50 17.3% Operating performance 29.5 16 14 Direct overheads (19.0) 40 12 29.5 Segment net profit 10.5 30 39.4 39.4 10 8 EBITDA 24.2 20 20.0 6 5.1% 4 10 14.6

  11. Slide 11: PB Towage – Outlook

    PB Towage – Outlook  Continued project activity in Australasia  Labour market shortages and cost pressures providing further demand for project and in Australia impacting project economics and construction cargo logistics timelines  Growth in Australian bulk exports,  Increased competition from

  12. Slide 12: Daily Vessel Costs – Handysize

    Daily Vessel Costs – Handysize Finance cost Charter-hire : Short-term (ST) / Long-term (LT) As at 31 December 2013 Depreciation Charter-hire : Index-linked Opex Chartered Inward Charter Commitments Owned Including finance lease vessels Days & rates Blended US$8,480 (2012: US$8,910) 2013-2015 US$/day

  13. Slide 13: Daily Vessel Costs – Handymax

    Daily Vessel Costs – Handymax Finance cost Charter-hire : Short-term (ST) / Long-term (LT) As at 31 December 2013 Depreciation Charter-hire : Index-linked Opex Owned Chartered Inward Charter Commitments US$/Day Days & Rates 14,000 Blended US$10,440 (2012: US$11,240) 2013-2015 Vessel Days 11,430 12,0

  14. Slide 14: Balance Sheet

    Balance Sheet PB PB Discontinued US$m Dry Bulk Towage Treasury RoRo 31 Dec 13 31 Dec 12 Vessels & other fixed assets 1,436 183 - - 1,622 1,270 Total assets 1,655 244 579 32 2,537 2,470 Long term borrowings 1,015 22 - - 1,037 931 Total liabilities 1,160 40 12 4 1,233 1,138 Net assets 495 204 567 28 1

  15. Slide 15: Borrowings and Capex

    Borrowings and Capex The Group had cash balances of US$486m, borrowings of US$1,037m and a net borrowings ratio of 34% against the Net Book Value of property, plant and equipment US$ million As at 31 Dec 2013 (17 March 2014 CB Announcement) 300 Investors’ Maturity Put Date Date 250 234 236 210 200 1

  16. Slide 16: Our Outlook and Strategy

    Our Outlook and Strategy Dry Bulk  Cyclical upturn has started – supply and demand balance continues to improve… expect a stronger, volatile dry bulk market in 2014  We remain selectively open to appropriately priced ship acquisitions to further position ourselves for a expected stronger market 

  17. Slide 17: 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,

  18. Slide 18: Pacific Basin Overview

    Appendix: Pacific Basin Overview  A leading dry bulk owner/operator of Handysize & Handymax dry bulk ships  Flexible Pacific Basin Dry Bulk business model  Large fleet of uniform, interchangeable, modern ships  Mix of owned and long-term, short-term chartered ships  Operating mainly on long ter

  19. Slide 19: Strategic Model

    Appendix: Strategic Model OUR STRONG CORPORATE & OUR LARGE VERSATILE FLEET FINANCIAL PROFILE Striving for best-in-class internal and external Fleet scale and interchangeable high-quality reporting, transparency and corporate stewardship dry bulk ships facilitate service flexibility to Robust balance

  20. Slide 20: Pacific Basin Dry Bulk – Diversified Cargo

    Appendix: Pacific Basin Dry Bulk – Diversified Cargo Pacific Basin Handysize and Handymax Cargo Volume 1Q 2014 Energy Agricultural Products Coal 2% Petcoke 8% 10% Grains & Agriculture Products 20% Fertiliser 9% Metals 33% Sugar 4% 14% Alumina 4% 12.2 Ores 4% Concentrates & Other Metals 6% Million To

  21. Slide 21: Fleet List – Mar 2014

    Appendix: Fleet List – Mar 2014* Pacific Basin Dry Bulk Fleet: 230 vessels operated in Mar 2014 Owned Chartered Total Delivered * Newbuilding Delivered * Newbuilding Fleet Details Handysize 64 13 91 15 183 www.pacificbasin.com Handymax 15 6 58 4 83 Post-Panamax 1 0 1 0 2 Total 80 19 150 19 268 PB To

  22. Slide 22: 2013 Annual Results – Group Highlights

    Appendix: 2013 Annual Results – Group Highlights Underlying Profit EBITDA US$ Million 2013 2012 145.1 47.8 130.4 Net Profit / (Loss) US$1.5m US$(159)m Earnings per Share HK¢0.6 HK¢(64) 15.6 Cash Position US$486m US$754m Dividend per Share HK¢5 (proposed) HK¢5 2012 2013 2012 2013  Group results were

  23. Slide 23: Pacific Basin Dry Bulk – 2013 Performance

    Appendix: Pacific Basin Dry Bulk – 2013 Performance Handysize Outperformed Market by: 22% US$ million 2013 Daily Earnings US$9,520 -9% YOY Dry Bulk net profit 26.1  Handysize contribution 51.9 Daily Costs US$8,480 -5% YOY  Handymax contribution 8.5  Direct overheads (40.0) Handymax Outperformed M

  24. Slide 24: 2013 Financial Highlights

    Appendix: 2013 Financial Highlights US$m 2013 2012 Segment net profit 36.0 78.0  Treasury (4.4) (6.1)  Discontinued Operations - RoRo (0.5) (12.1)  Non direct G&A (15.5) (12.0) Underlying profit 15.6 47.8  Unrealised derivative income/(expenses) 1.8 (3.3)  RoRo exchange loss & vessel impairment

  25. Slide 25: Pacific Basin Dry Bulk

    Appendix: Pacific Basin Dry Bulk Handysize 2013 2012 Change Revenue days (days) 52,550 41,000 +28% TCE earnings (US$/day) 9,520 10,460 -9% Owned + chartered costs (US$/day) 8,480 8,910 -5% Handysize contribution (US$m) 51.8 62.0 -16% Handymax contribution (US$m) 8.5 6.7 +27% Post Panamax contributio

  26. Slide 26: Cash Flow – 2013 Sources and Uses of Group Cash Flow

    Appendix: Cash Flow – 2013 Sources and Uses of Group Cash Flow Cash inflow Cash outflow Operating cash flow US$98m US$ Milion EBITDA US$130m 1,100 +55 +100 2014 cash levels expected to be affected by: 1,000 +98  Pace of capital expansion 900  New loan facilities to be secured using our 800 +753 ex

  27. Slide 27: Vessels Commitments

    Appendix: Vessels Commitments As at 31 December 2013 Total US$525m US$m 250 236 200 93 138 150 132 23 100 61 109 143 50 77 19 19 0 2014 2015 2016 2017 Handysize x 16, US$329m Handymax x 8, US$196m  Further commitments expected in Dry Bulk 1Q14 Trading Update 27

  28. Slide 28: Convertible Bonds Due 2016

    Appendix: Convertible Bonds Due 2016 Issue size US$230 million (US$20.5m face value put back and repaid on 14 April 2014; Remaining: US$210m) Maturity Date 12 April 2016 (6 years) Investor Put Date and Price 12 April 2014 (4 years) at par Coupon 1.75% p.a. payable semi-annually in arrears on 12 Apri

  29. Slide 29: Convertible Bonds Due 2018

    Appendix: Convertible Bonds Due 2018 Issue size US$123.8 million Maturity Date 22 October 2018 (6 years) Investor Put Date and Price 22 October 2016 (4 years) at par PB’s Call Option 1) Trading price for 30 consecutive days > 130% conversion price in effect 2) >90% of Bond converted / redeemed / pur

  30. Slide 30: China at late-Industrialisation Stage

    Appendix: China at late-Industrialisation Stage Steel Consumption Per Capita Tons per Capita 1.0  China growth matches historical trend in Japan and Korea 0.9  Suggests strong growth in dry bulk 0.8 segment to remain for medium term 0.7  Similar trend for electricity and cement 0.6 0.5 0.4 0.3 0.

  31. Slide 31: China Dry Bulk Trade, Iron Ore & Coal Demand

    Appendix: China Dry Bulk Trade, Iron Ore & Coal Demand Chinese Dry Bulk Trade Volume China is a significant net China Iron Ore Sourcing importer of coal for Steel Production Mil tonnes 1800 31% Mil Tonnes Million Tonnes 29% 400 1,400 1,239 1,256 1500 352 350 1,200 319 1200 300 1,000 888 250 820 900

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