Pacific Basin Shipping Limited · HKEX:2343

Pacific Basin Shipping — H1 2012 Earnings Presentation

34 slides from Pacific Basin Shipping's earnings presentation, Aug 1, 2012

  1. Slide 1: Analysts

    Analysts [= Pacific Basin

  2. Slide 2: 2012 Interim Results – Group Highlights

    2012 Interim Results – Group Highlights 1H12 1H11 Revenue and Net Profit US$ Million Net (Loss) / Profit US$(196)m US$3m 100 69 48 Underlying Profit US$3.2m US$19m 50 3.2 19 3 0 Operating Cash Flow US$48m US$69m -50 Cash Position US$657m US$631m -100 -150 Earnings per Share HK¢(79) HK¢1 -200 -196 1H

  3. Slide 3: Pacific Basin Dry Bulk – 1H12 performance

    Pacific Basin Dry Bulk – 1H12 performance Handysize 1H12  Handysize daily rate: US$10,540 (-23% YOY) Dry Bulk net profit US$7.5m  Outperformed the weak spot market by 38%  Respectable performance in a on-going poor market Operating cash flow US$38.1m Handymax Return on net assets 2%  Handymax da

  4. Slide 4: Pacific Basin Dry Bulk - Earnings Coverage

    Pacific Basin Dry Bulk - Earnings Coverage Handysize Handymax As at 23 July 2012 33,060 days 10,680 days Fixed Revenue days 22,490 days Unfixed 4,470 days 85% 19% 94% 40% US$10,910 US$12,370 US$11,830 US$13,890 2012 2013 2012 2013 Pacific Basin Dry Bulk Fleet: 182 (on the water: 160) Average Age of

  5. Slide 5: Dry Bulk Market Information

    Dry Bulk Market Information  Market freight rates for Handysize and Handymax declined 34% and 49% in first six weeks to 3-year lows  A surge of newbuilding deliveries  Seasonal weather-related cargo disruptions in influential trades areas and an early Chinese New Year  Rates gradually recovered

  6. Slide 6: Dry Bulk Demand

    Dry Bulk Demand % Change Dry Bulk Fleet Effective Demand China Minor Bulk Imports YOY m tonnes 2012 25 2011 25 23 2010 20 20 15 19 20 17 10 6.5% 14 17 5 15 0 -5 10 YTD Imports have -10 increased 20% YOY 5 -15 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Q1 Q2 Q3 Q4 1Q 2Q 3Q 4Q 1Q 2Q 3Q4Q 1Q 2Q 3Q

  7. Slide 7: Global Dry Bulk Fleet Development

    Global Dry Bulk Fleet Development  Dry bulk capacity expanded 6.4% net in first half, and Handysize Age Profile (25,000-39,999 dwt) 2,110 vessels (67.7m dwt) 14.5% net YOY  Driven by the influx of 56m tonnes of new capacity 30+ years  Heavy influx of newbuildings was partially offset by 8% record

  8. Slide 8: Dry Bulk Orderbook

    Dry Bulk Orderbook Handysize Orderbook 452 vessels (16m dwt) m Dwt 9  Ship owners ordered >60% less new capacity in 1H12 due 11.4% 8 40% to weak market conditions 7 9.0% 6 shortfall  139m dwt of new capacity scheduled to deliver in FY12 * 5 4  Newbuilding deliveries of 56m dwt were 34% below the

  9. Slide 9: Pacific Basin Dry Bulk - Outlook

    Pacific Basin Dry Bulk - Outlook  Strong Chinese demand for minor bulk commodities  Continued excessive newbuilding deliveries  Growth in China’s dominant share of global bulk  Hesitant global economic recovery impacted by imports continued crisis in Europe  Scope of stronger recovery in US  P

  10. Slide 10: PB Towage

    PB Towage 1H12 Performance 1H12  Favourable market conditions and improved market presence Towage net profit US$14.1m and penetration continued to strengthen our towage results Operating cash flow US$18.9m Offshore Towage Return on net assets 12% (Annualised)  Australian offshore and infrastructur

  11. Slide 11: PB Towage - Outlook

    PB Towage - Outlook  New projects expected to commence  Potential further slowdown in Chinese in Australasia towards year end in both industrial growth impacting Australian oil and gas and mining sectors commodity exports and port activity  Continued improvement in Australian  On-going labour ma

  12. Slide 12: PB RoRo

    PB RoRo 1H12 Performance 1H12  Severe weakness in the RoRo charter market PB RoRo net loss US$(8.5)m  Achieved average daily charter rates of Operating cash flow US$(0.8)m US$19,450 on utilisation of 55% Return on net assets -12% (Annualised) RoRo Earnings Cover Revenue Days (as at 23 July 2012) B

  13. Slide 13: PB RoRo - Outlook

    PB RoRo - Outlook  Potential development of new RoRo trades  Prolonged economic stagnation – possible recession – within and outside Europe in Europe resulting in weak intra-European and a  Increased levels of scrapping of older albeit further fall in trailer volumes smaller ships to reduce over-

  14. Slide 14: PB RoRo - Latest Developments

    PB RoRo - Latest Developments  Immediate actions:  Closing RoRo management joint venture Meridian  Bring commercial management in-house  Outsource technical management  These changes afford us:  Full control and greater flexibility in pursuing strategic employment and exit alternatives, commer

  15. Slide 15: 2012 Interim Financial Highlights

    2012 Interim Financial Highlights US$ m 1H12 1H11 1H 2012 Principal Segment Net Profit and Segment net profit 9.7 28.8 Return on Net Assets US$ m  Treasury (0.9) (5.8) 50  Non direct G&A (5.6) (4.2) 7.5 14.1 0 -8.5 Underlying profit 3.2 18.8 -50  Unrealised derivative expenses (9.1) 8.4 -100  Ro

  16. Slide 16: Pacific Basin Dry Bulk - Handysize

    Pacific Basin Dry Bulk - Handysize 1H12 1H11 Change Revenue days (days) 19,210 14,620 +31% TCE earnings (US$/day) 10,540 13,660 -23% Owned + chartered costs (US$/day) 9,890 10,640 -7% Net profit (US$m) 10.3 42.9 -76% Return on net assets (%) 3% 13% -10%  Earnings: 1H12 Time Charter Equivalent rates

  17. Slide 17: Daily Vessel Costs - Handysize

    Daily Vessel Costs - Handysize As at 30 Jun 2012 Direct overhead Charter-hire Finance cost Depreciation Opex Owned* Chartered US$/day Daily charter hire rates & days 14,000 Blended US$9,890 (FY2011: US$10,680) 2H12-2014 12,340 12,000 530 $11,650 10,310 $10,930 $10,150 10,000 9,250 430 8,720 970 8,00

  18. Slide 18: Daily Earnings and Vessel Costs – RoRo

    Daily Earnings and Vessel Costs – RoRo As at 30 Jun 2012 RoRo Performance RoRo daily vessel costs US$/Day US$/Day 20,000 18,730 $21,190 1,670 17,280 $18,730 $19,450 1,030 1,520 days 15,000 $17,280 250 7,250 6,270 days 1,090 days Finance cost 10,000 490 Depreciation days Opex 9,810 9,980 5,000 1,270

  19. Slide 19: Balance Sheet

    Balance Sheet PB PB PB US$m Dry Bulk Towage RoRo Treasury 30 Jun 12 31 Dec 11 Vessels & other fixed assets 969 207 178 - 1,360 1,525 Total assets 1,192 299 184 572 2,306 2,432 Long term borrowings 289 32 44 487 853 779 Total liabilities 424 54 48 491 1,046 947 Net assets 768 245 136 81 1,260 1,485 N

  20. Slide 20: Capex and Combined Vessel Value

    Capex and Combined Vessel Value As at 30 Jun 2012 Vessels Commitments A Combined View of (including authorised commitments) Vessel Carrying Values and Commitments Total US$262m US$ m Total US$1,616m US$ m 140 135 1,400 1,231 120 1,200 107 262 100 1,000 144 80 53 102 800 60 600 400 825 40 21 207 178

  21. Slide 21: Borrowing and Capex

    Borrowing and Capex The Group had cash balances of US$657m, borrowings of US$853m and a net borrowings ratio of 14% against the Net Book Value of property, plant and equipment post impairment As at 30 Jun 2012 US$ m 250 230 Redeemable in Apr 2014 200 150 135 140 107 100 85 81 69 59 50 29 35 34 37 21

  22. Slide 22: Cash Flow

    Cash Flow First Half 2012 Sources and Uses of Group Cash Flow US$ m Operating cash flow US$48.0m 750 +80.0 EBITDA US$53.7m (excluding impairment) 700 +48.0 -73.3 +2.7 +656.8 650 -12.5 -6.3 +618.2 600 550 500 Opening Operating Increase in Capex Dividend Net Others Closing Cash cash inflow borrowings

  23. Slide 23: Our Position, Outlook, and Strategy

    Our Position, Outlook, and Strategy Dry Bulk  Strong cargo and customer focused business model – Outperforming both market and larger ships  Capacity expansion, slower Chinese growth and uncertainty in global trade  Expect weaker freight rates overall in 2012 than 2011  Protracted dry bulk marke

  24. Slide 24: 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,

  25. Slide 25: Appendix: 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

  26. Slide 26: Appendix: Our Dry Bulk Business Model

    Appendix: Our Dry Bulk Business Model  Largest owner and operator of modern Handysize ships with 9% share of global fleet of  19 offices globally – including 14 modern (max 15 years) 25,000-40,000 dwt bulk dry bulk offices across 6 continents carriers  Localised chartering and operations  Scale

  27. Slide 27: Appendix: Pacific Basin Dry Bulk – Diversified Cargo

    Appendix: Pacific Basin Dry Bulk – Diversified Cargo Pacific Basin Handysize and Handymax Cargo Volume 1H12 Sugar 4% Grains & 15% Agriculture Products Salt 4% Logs & 14% Alumina 6% Forest Products Coal/Coke 6% 17.8 Fertilisers 10% Other Bulks 6% Million Tonnes 6% Cement & Ore 9% Cement Clinker Petco

  28. Slide 28: Appendix: 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.

  29. Slide 29: Appendix: 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 net importer China Iron Ore Sourcing of coal in 2012 for Steel Production m tonnes m tonnes m tonnes 1,140 1,200 1,095 1,200 300 29% 258 26% 27% 1,000 4% 250 +41% 900 25% 183 800 734 200 687 600 7% 150 60

  30. Slide 30: Appendix: Pacific Basin Dry Bulk - Handymax

    Appendix: Pacific Basin Dry Bulk - Handymax 1H12 1H11 Change Revenue days (days) 6,940 6,390 +9% TCE earnings (US$/day) 11,520 15,130 -24% Owned + chartered costs (US$/day) 12,280 16,190 -24% Net (loss)/profits (US$m) (5.6) (7.5) -25% Contribution from Post Panamax (US$m) 2.8 0.3 +833% Net (loss)/pr

  31. Slide 31: Appendix: Daily Vessel Costs – Handymax

    Appendix: Daily Vessel Costs – Handymax As at 30 Jun 2012 Direct overhead Charter-hire Owned Chartered Finance cost Depreciation US$/Day Opex 20,000 Blended US$12,280(FY2011: US$15,840) 16,030 15,000 440 12,440 530 9,370 10,000 9,490 930 1,200 15,590 3,750 3,530 11,910 5,000 4,810 4,640 0 2011 1H12

  32. Slide 32: Appendix: PB Towage Net Profit by Division

    Appendix: PB Towage Net Profit by Division As at 30 Jun 2012 US$ m 30 11.5% 25 6.6% 20 Harbour Towage 15.2 Offshore & infrastructure projects 15 14.1 Middle East & others Total return on net assets 10 13.6 10 5 3 4.1 0 - 1.4 -5 2011 1H12 2012 Interim Results 32

  33. Slide 33: Appendix: PB RoRo Impairment in June 2012

    Appendix: PB RoRo Impairment in June 2012  18 June, announced US$190m non-cash impairment following reassessment of RoRo prospects  Euro-centric RoRo market severely impacted by protracted European debt crisis and macro- economic and political uncertainty  Significantly reduced demand for charter

  34. Slide 34: Appendix: Convertible Bonds Due 2016

    Appendix: Convertible Bonds Due 2016 Issue size US$230 million 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 April and 12 October Redemption Price 100% Initial Conversion Price HK$7.98 (Curren

Pacific Basin Shipping — H1 2012 Earnings Presentation on 6ix