Himalaya Shipping Ltd. · OSL:HSHP
Himalaya Shipping — Pareto Securities' 29th annual Energy Conference (2022)
15 slides from Himalaya Shipping's conference presentation, 2022
Slide 1: Taking the next step on shipping's path to zero emissions
Taking the next step on shipping’s path to zero emissions, offering optionality and high profitability potential Pareto Securities’ 29th annual Energy Conference HIMALAYA-SHIPPING.COM 1
Slide 2: Disclaimer
Disclaimer This presentation (the "Presentation") has been prepared by Himalaya Shipping Ltd. (the "Company") solely for information purposes. The Presentation does not constitute any recommendation to buy, sell or otherwise transact with any securities issued by the Company. No representation, warr
Slide 3: Himalaya Shipping Summary
Himalaya Shipping Summary 12 Dual fuel Newcastlemax vessels to be delivered between Q2 2023 and Q3 2024 Vessels can sail on LNG/HFO/LSFO giving full optionality/endurance for Brazil - China round voyage Fleet of vessels will comply with EEXI/CII by a clear margin for the foreseeable future Vessels l
Slide 4: Himalaya Shipping - project overview
Himalaya Shipping - project overview Ship Price1 (USDm) Yard Size (DWTk) Ship type Target delivery date Mount Norefjell 70.2 NTS 208 Dual fuel Newcastlemax Mar-23 Mount Ita 70.2 NTS 208 Dual fuel Newcastlemax Mar-23 Mount Etna 70.2 NTS 208 Dual fuel Newcastlemax Apr-23 Mount Blanc 70.2 NTS 208 Dual
Slide 5: Ageing Cape fleet creating tight tonnage supply
Ageing Cape fleet creating tight tonnage supply A lot of ships meeting age limit Significant fleet replacement needed 300 # ships scrapped pr year # ships scrapped pr year Year Scrapping candidates until 2030 (if scrapped @ 20 years) (if scrapped @ 15 years) 2023 70 320 250 2024 41 110 200 2025 47 2
Slide 6: Himalaya meeting new IMO regulations
Himalaya meeting new IMO regulations Large part of the fleet non-compliant with new regulation Even 2014 built bulkers face EEXI compliance issues2 • Ships >5000 tdw MUST comply with relevant EEXI standards at first class survey EEXI rating due in 2023 i.e. annual, intermediate or renewal survey to
Slide 7: The green twist – the ships save CO2 equal to 40,000 cars
The green twist – the 12 ships save CO2 equal to 40,000 cars - Around half of Norway’s EV sales pr year Significantly lower CO2 emissions Significantly lower NOx emissions Significantly lower SOx emissions kT of CO2/year T pr year T pr year 40% reduction in CO2 99% reduction in NOX 99% reduction in
Slide 8: Significant value upside
Significant value upside High sensitivity to increasing asset prices Illustrative NAV pr share (in $) based on different value pr ship assumptions $32.2/share Previous peak Order made Jan-22 Chinese quotes 2024 delivery1 2026 delivery Current implied $9.8/share $8.7/share $4.9/share 75.5 85.0 88.0 1
Slide 9: Significant cash-flow
Significant cash-flow High sensitivity to an improving market Illustrative dividend pr share (in $) and yield (%) based on different rate assumptions $25.1/share – 512% Previous peak $3.1/share – 64% $3.3/share – 66% 20 year avg - $32,800/day 2021 average - $33,500/day 20 year high - $148,000/day Hi
Slide 10: Market review
Market review 90 000 80 000 70 000 60 000 50 000 40 000 30 000 20 000 10 000 0 02.01.2015 02.02.2015 02.03.2015 02.04.2015 02.05.2015 02.06.2015 02.07.2015 02.08.2015 02.09.2015 02.10.2015 02.11.2015 02.12.2015 2015-21 max-min range 2022 2021 2015-21 average • Unseasonally weak market so far during
Slide 11: Fleet efficiencies have normalized to pre-Covid averages
Fleet efficiencies have normalized to pre-Covid averages 36 34 32 % of capesize fleet in port, 7dma 30 28 26 24 22 20 % of Capesize fleet in port, 7dma Pre-covid average Post-covid average HIMALAYA-SHIPPING.COM 11 Source: Shipping Intelligence Network
Slide 12: Capesize demand is marginally up compared to 2021
Capesize demand is marginally up compared to 2021 Trading volumes up YoY… …but distances are down significantly Resulting in only 1% ton-mile growth YoY 3.9 6200 2.2 6100 2.15 3.7 2.1 6000 3.5 2.05 5900 2 3.3 1.95 5800 1.9 3.1 1.85 5700 1.8 2.9 5600 1.75 2.7 1.7 5500 19 37 55 73 91 1 109 127 145 163
Slide 13: Attractive supply / demand dynamics
Attractive supply / demand dynamics Historical volume growth of 4.8% pa Historically low orderbook Demand likely to outstrip supply 120% 1600 6.0 % 5.0 % 1400 100% 4.0 % 1200 3.0 % 80% 2.0 % 1000 Million tons 1.0 % 60% 0.0 % 800 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 22 22 23 23 23 23 24 24 24 24
Slide 14: Signs of increased infrastructure investments in China
Signs of increased infrastructure investments in China China Local Government Special Bond Issuance China fixed asset invesment 4000 50% 3500 3 406 40% 30% 3000 20% 2 570 YoY Change 2500 10% Billion CNY 0% 2000 -10% 1500 -20% 1 014 -30% 1000 -40% aug.16 aug.17 aug.18 aug.19 aug.20 aug.21 feb.16 feb.
Slide 15: Vale still expects an increase in production for the balance of 2022
Vale still expects an increase in production for the balance of 2022 Vale production vs Capesize rates 45 000 105.0 Q3-Q4 TO 40 000 VOLUMES 100.0 NEEDED TO 35 000 MEET VALE 95.0 Vale production million tons GUIDANCE 90.0 30 000 Capesize rate 85.0 25 000 80.0 20 000 75.0 15 000 70.0 10 000 65.0 5 000
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