Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping — Investor Presentation (September 2008)
32 slides from Great Eastern Shipping's investor presentation, September 2008
Slide 1: Business & Financial Review September 2008
The Great Eastern Shipping Co. Ltd. Business & Financial Review September 2008 1
Slide 2: Forward Looking Statements
Forward Looking Statements 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
Slide 3: Corporate Profile
Corporate Profile The Great Eastern Shipping Co. Ltd. Incorporated in 1948 Shipping Business Offshore Business Wet bulk Through wholly owned subsidiary Greatship (India) Limited Crude Tankers Product Tankers Offshore oil field Support & Logistics Services Dry bulk 3
Slide 4: Company at a glance
Company at a glance $ India’s largest private sector Shipping Company $ Completed 60 years of operations $ Diverse asset base with global operations $ More than 25 years of uninterrupted dividend track record $ Rated ‘AAA’ (Domestic Currency Debt) since 1996 Shareholding Pattern as on Jun 30th, 2008
Slide 5: Shipping business-owned fleet
Shipping business-owned fleet 41 ships aggregating 2.85 Mn dwt, avg.age 10.6 years 30 Tankers avg.age 9.7 years (78% in tonnage terms) 12 Crude carriers (6 Suezmax, 6 Aframax) avg.age 8.5 years (2 single hull – both double sided) 16 Product tankers (11 MR, 5 GP) avg.age 11.7 years (5 single
Slide 6: Shipping business – Inchartered fleet
Shipping business – Inchartered fleet Total Inchartered Fleet : 9 ships (including in subsidiaries) Tankers : 4 9 2 Suezmax Crude Carriers 9 1 Aframax Crude Carrier 9 1 MR Product Tanker Dry Bulk : 5 9 4 Supramax Bulk Carriers 9 1 Panamax Bulk Carrier 6
Slide 7: Committed CAPEX – Shipping Business
Committed CAPEX – Shipping Business Committed Capex of around USD 779 Mn - 14 new building contracts aggregating 1.17 mn. dwt 9FY 2009 - 2 NB, LR 1 Product Tankers (Q3) (STX Shipbuilding Co. Ltd) - 1 NB, LR 1 Product Tankers (Q4) (STX Shipbuilding Co. Ltd) 9FY 2010 - 1 NB, LR 1 Product Tankers (Q1)
Slide 8: Offshore business- Fleet Profile
Offshore business- Fleet Profile ¾ Current Owned Fleet 9 4 Platform Supply Vessels (PSV) 9 2 Anchor Handling Tug cum Supply Vessel (AHTSV) ¾ Current Inchartered Fleet 9 1 Anchor Handling Tug cum Supply Vessel (AHTSV) 9 2 Platform Supply Vessels (PSV) Fleet Growth FY2008 FY2009E FY2010E FY2011E Fleet
Slide 9: Committed CAPEX – Offshore Business
Committed CAPEX – Offshore Business ¾ Committed Capex of around USD 787 Mn* 9 FY 2009 - 1 NB PSVs (Aker) delivery (Q3) - 2 NB 80T AHTSVs (Labroy) (Q4) - 1 NB 80T AHTSV (CDL) (Q4) 9 FY 2010 - 2 NB 80T AHTSV (CDL, Labroy) (Q1) - 1 NB 80T AHTSV (Labroy) (Q2) - 4 NB MPSVs (Keppel Singmarine) [(2 in Q2 &
Slide 10: Committed Capex for the Group
Committed Capex for the Group Made Equity Investment of Rs.852 crs G E Shipping Greatship (India) Ltd (Committed CAPEX (Committed CAPEX USD 779 mn) USD 787 mn) Total committed CAPEX of USD 1.6 bn Spread over next two & half years To be financed with a mix of debt & internal accruals Group D/E ratio
Slide 11: Business Philosophy
Business Philosophy Strive to deliver through the cycle Risk Management Mechanism Revenue Cost Asset -Mix of Spot v/s Time -Bunker Hedging -Timing acquisitions & sales -FX Hedging -Interest Rates 11
Slide 12: Strategy – Offshore business
Strategy – Offshore business Entry Strategy 9 Shallow water supply & towage Growth Strategy 9 Support to Deepwater and Construction Special Area 9 Supporting deepwater activities in ECI Approach Build strong understanding of markets and customers Acquire assets based on customer requirements D
Slide 13: Financial Review
Financial Review 13
Slide 14: Performing through the years (EPS, dividend, tonnage)
Performing through the years. . . 100.0 3.5 3.26 89.0 90.0 Avg Cash Profits for the last 8 years: Rs. 863 crs 3.02 2.92 3.07 3 80.0 2.47 70.0 2.5 58.0 Rs/ Share 60.0 2 mn dwt 55.1 50.0 1.32 42.3 1.37 1.28 1.5 40.0 30.0 24.3 1 20.0 15.0 11.4 11.2 11.5 8.0 8.8 6.5 9.0 0.5 10.0 2.8 4.0 4.0 0.0 0 2000-0
Slide 15: Performing through the years (BV, NAV, ROE)
Performing through the years. . . 600 50 553 43.80 45 Avg ROE for the last 8 years: 30% 40.60 500 34.80 40 405 37.50 35 400 Rs. Per share 32.40 335 30 282 274 % 300 19.50 25 17.48 20 15.96 201 200 157 139 15 115 84 10 100 67 67 79 50 53 62 5 0 0 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06* 2006-
Slide 16: Financial Highlights of Q1 FY09 Performance
Financial Highlights of Q1 FY09 Performance (Rs.crs) Q1FY09 Q1FY08 % change FY08 Freight & Charter hire 702 637 10% 2,581 Gain on sale of ships 254 79 221% 289 Others 36 38 (5)% 186 Total Income 992 754 32% 3,056 Total Expenditure 319 324 (2)% 1,310 Operating Profit 673 430 57% 1,746 Exceptional Ite
Slide 17: Q1 FY09 Performance Highlights
Q1 FY09 Performance Highlights &Rise in freight & charter income despite drop in operating revenue days by 15% &Higher profit from sale of ships – 5 vessels delivered in Q1 FY09 &Crude & Dry bulk carriers earnings witnessed smart upmove Particulars (Rs. Crs) GE Shipping Greatship Total Debt as on 30
Slide 18: Earnings Mix
Earnings Mix GE Shipping Average TCY Details Q1 FY09 Q1 FY08 % change AverageTCY ($ per day) FY08 FY07 % change 40,737 29,488 38% Crude Carriers 30,021 29,759 0.9% 22,146 22,182 -0.2% Product Carriers 20,236 20,302 -0.3% 17,460 16,564 5% Gas Carriers 17,053 15,787 8% 50,619 28,446 78% Dry Bulk Carri
Slide 19: Ship prices continue to be firm
Ship prices continue to be firm 180 Asset Price Movement (5 yr old) 180 160 160 $ USD mn. $ USD mn. 140 140 Tankers 120 120 Bulk 100 100 80 80 60 60 40 40 20 20 0 0 16/09/2003 Time line- Sep 2003 til Aug 18, 2008 VLCC AFRAMAX CAPESIZE PANAMAX(DRY) Source: Baltic Sale & Purchase Assessment 19
Slide 20: Asset prices – new and old
Asset prices – new and old Amt in US$ mn VLCC Suez Afra Pana Cape Pana H'max H'size New bldg (order) 160 100 82 54 99 55 49 40 New bldg (resale) 195 120 89 70 165 95 84 55 5 yr old 165 105 79 59 155 89 74 54 10 yr old 135 85 64 49 116 78 62 47 Steep backwardation in all asset classes Source: Clark
Slide 21: Shipping Industry Outlook
Shipping Industry Outlook 21
Slide 22: Strong Oil consumption led by M.East & Asia
Strong Oil consumption led by M.East & Asia Source: IEA- Jul’08 - OPEC’s world oil demand forecast for 2008 revised to 86.8 mbpd. Increase of 1.05% yoy. - US is becoming a smaller portion of the total demand picture (24.5% in 2006 to 22.5% in 2009) -Two major factors in facilitating demand growth in
Slide 23: Outlook for Crude Tankers
Outlook for Crude Tankers Short Term : 9High volatility expected as there is tightness in supply/demand 9Lower levels of inventory as compared to CY07 Concerns: - Impact of global financial crisis Long Term : on the world energy demand 9Stricter compliance to IMO deadline 9Quantum of conversions cau
Slide 24: Outlook for Product Tankers
Outlook for Product Tankers - Longer term structural shift of trade patterns to continue - Refining capacity to grow in the Mid East/India/Far East - Increased long haul activity for distillate trades (Jetfuel, Diesel,Gasoil) - as net deficit in western markets is growing - Significant demand for pe
Slide 25: Dry Bulk – Growth Driven by Asia
Dry Bulk – Growth Driven by Asia Breakup of commodities transported Imports - Regional Distribution Others 4% N.America Iron Ore 4% M.East 27% 4% Africa S.America 4% Minor 3% Others Bulk 2% 33% Europe 24% Asia Coal 59% Grains 26% 10% Asia contributes to 59% of dry bulk imports, whereas North America
Slide 26: Dry Bulk Trade - on strong trajectory
Dry Bulk Trade - on strong trajectory (in mn.tonnes) 2007 2008 % Chg Total Dry Bulk trade 5009 5223 4% of which 5 major: 9China will contribute to more than 50 % of world - Iron Ore 785 850 8% iron ore imports in 2008. - Coking Coal 211 224 6% - Steam Coal 574 589 3% 9India’s coal imports to pick -
Slide 27: Tonne Mile demand
Tonne Mile demand Sources Destinations Australia (305), Brazil (295) China (436), Japan (141) India (88), S.Africa (33) Iron Ore Korea (49), EU (131) Indonesia (196), Australia (108) Japan (127), S.Korea (70), Taiwan (61) Steam Coal S.Africa (69), Colombia (67), China (45) EU(154), US (ex.Canada) (3
Slide 28: Outlook for Dry Bulk sector
Outlook for Dry Bulk sector Short Term: - Port problems - Calamities/exigencies in some countries Long Term: - Demand for raw material for infrastructure growth in India & China - Aging fleet due to low level of scrapping Risks: • High order book position: 64% of current world fleet on order • Impac
Slide 29: Outlook on Offshore Industry
Outlook on Offshore Industry 9 Under-investment in global E&P in the past 9 Structural change in demand 9 No commercially viable alternatives 9 Shift from International oil companies to National oil companies 9 Numerous new countries exploring 9 Oil/Gas discoveries moving towards deeper waters Conce
Slide 30: Gross World fleet addition-Shipping
Gross World fleet addition-Shipping World Fleet addition* 2008 2009 2010 20% of world tanker fleet single hull Crude tankers 4.6% 14.4% 10.8% Product tankers 9.5% 13.4% 9.0% Dry bulk carriers 3.8% 15.4% 21.5% *includes only new building from yards Fleet as on Jul-08 Scrapping (in mn dwt) (in mn dwt)
Slide 31: Offshore Supply Market
Offshore Supply Market OSV Fleet Summary (Nos) AHTSVs PSVs Others Current Fleet* 2,148 1,760 1,708 Orderbook 547 261 216 Aging Fleet % of O/B to current fleet 25% 15% 13% 9 52% of the total fleet * Data as on Jul’08, Source: Clarkson over 25 years old Offshore Installations Delivery Schedule Type Cu
Slide 32: THANK YOU
THANK YOU visit us at www.greatship.com 32
The Great Eastern Shipping — Investor Presentation (September 2008) on 6ix