Pacific Basin Shipping Limited · HKEX:2343

Pacific Basin Shipping — Macquarie APAC Industrials, Infrastructure & Transportation Corporate Day 2012

34 slides from Pacific Basin Shipping's conference presentation, Nov 9, 2012

  1. Slide 1: 3Q 2012 Trading Update

    Macquarie APAC Industrials, Infrastructure & Transportation Corporate Day - Nov 2012 Hong Kong 3Q 2012 Trading Update 9 Nov 2012

  2. Slide 2: 2012 Third Quarter Highlights

    2012 Third Quarter Highlights Pacific Basin Dry Bulk  Handysize and Handymax spot market rates fell 37% over 3Q which will reduce our 4Q earnings  4Q and full-year dry bulk market outlook is bleak  Our forward cargo cover for FY2012: Handysize: 93% covered at US$10,820/day Handymax: 96% covered a

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

    Pacific Basin Dry Bulk - Earnings Coverage Handysize Handymax As at 15 Oct 2012 39,060 days Fixed  Our dry bulk business 13,260 days model continues to Unfixed enable us to outperform Revenue days the market 21,770 days1  Handysize spot market rates averaged 4,740 days US$7,600/day net YTD 93% 26%

  4. Slide 4: Dry Bulk Market Information

    Dry Bulk Market Information  Growth in global dry bulk trade has failed to match global fleet expansion - Weak spot market in 3Q - Continued weak outlook for dry bulk in remainder 2012  Handysize and Handymax spot market rates fell 37% over 3Q  Handysize and Handymax average freight rates exceede

  5. Slide 5: Dry Bulk Demand

    Dry Bulk Demand % change YOY Dry Bulk Effective Demand China Minor Bulk Imports 25 M tonnes 2012 2011 25 20 23 2010 15 20 20 19 8.3 8.2 17 10 14 17 18 17.5 15 5 0 10 YTD Imports have -5 increased 12% YOY 5 -10 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -15 China imports of a basket of 7 importa

  6. Slide 6: Global Dry Bulk Fleet Development

    Global Dry Bulk Fleet Development  Fleet grew by: Handysize Age Profile (25,000-39,999 dwt) Handysize Dry Bulk overall 2,120 vessels (68.2m dwt) 3Q12 0.2% 1.5% Last 12 months 5.0% 12.7% 30+ years  Driven by the influx of 18m tonnes of new capacity 6% in 3Q (deliveries slowing) 25- 29 years 0-15 ye

  7. Slide 7: Dry Bulk Orderbook

    Dry Bulk Orderbook Handysize Orderbook 397 vessels (14m dwt) m Dwt 12  Ship owners ordered >54% less new capacity YOY due to 26% 10 Shortfall weak market conditions 8 9.5%  139m dwt of new capacity scheduled to deliver in FY12 * 6 6.7%  Newbuilding deliveries of 81m dwt were 27% below the 4 3.8%

  8. Slide 8: Pacific Basin Dry Bulk - Outlook

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

  9. Slide 9: PB Towage

    PB Towage 3Q12 Performance PB Towage Fleet: 45 vessels (as at 15 Oct 2012)  Robust demand for marine construction support is driving strong utilisation of our tug and barge fleet  Core fleet of offshore tugs and barges have employment cover through 2013  Expansion of our operational and technical

  10. Slide 10: 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

  11. Slide 11: PB RoRo - Latest Developments – Sale of RoRo vessels

    PB RoRo - Latest Developments – Sale of 6 RoRo vessels  Signed Agreement to sell all 6 RoRo vessels to Atlantica (a Grimaldi Group company)  Consideration: Eur153m (approx. US$188m)  Atlantica will purchase at least one vessel by end of each six month period ending 30 June and 31 December in 2013

  12. Slide 12: PB RoRo

    PB RoRo 1H12 1H12 Performance  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) Earnings Coverage after sale of 6 RoRo vessels (as at 1

  13. Slide 13: PB RoRo – Estimated Financial Impact of Sale

    PB RoRo – Estimated Financial Impact of Sale As at 7 Sep 2012 Estimated financial effect of 6 vessel sale (RoRo announcement) on PB consolidated P/L : US$m 2012 2013 2014 2015 Total Interest income 0.6 8.5 6.1 2.7 17.9 Additional (0.4) - - - (0.4) impairment charge Group non-cash (11.1) (16.5) - - (

  14. Slide 14: 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

  15. Slide 15: 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

  16. Slide 16: Capex and Combined Vessel Value

    Capex and Combined Vessel Value As at 30 Jun 2012 Vessel Commitments A Combined View of Vessel Carrying Values and Commitments Total US$262m Total US$1,612m 1 US$ m US$ m 140 135 1,400 120 107 1,231 1,200 100 262 1,000 102 144 80 53 800 60 600 825 40 400 21 207 174 20 54 200 33 21 0 - 2H12 2013 2014

  17. Slide 17: Borrowing and Capex

    Borrowing and Capex  The Group had cash balances of US$657m, borrowings of US$853m and a net borrowings ratio of 14% against the Net Book Value of property, plant and equipment post impairment  October 2012: issued new 1.875% Convertible Bonds due Oct 2018 with Oct 2016 put date US$ m As at 30 Jun

  18. Slide 18: 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

  19. Slide 19: 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

  20. Slide 20: 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,

  21. Slide 21: 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

  22. Slide 22: 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

  23. Slide 23: Pacific Basin Dry Bulk – Diversified Cargo

    Appendix: Pacific Basin Dry Bulk – Diversified Cargo Pacific Basin Handysize and Handymax Cargo Volume 1Q-3Q12 Salt 4% Grains & Agriculture Products 15% Sugar 4% Alumina 6% Logs & Forest Products 14% Other Bulks 6% 29.9 Million Fertilisers 10% Concentrates 6% Tonnes Ore 6% Cement & Cement Clinker 8%

  24. Slide 24: 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.

  25. Slide 25: 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 1,144 1,200 1,095 1,200 250 29% 226 27% +28% 26% 1,000 4% 25% 200 183 900 800 731 150 687 600 6% +24% 6

  26. Slide 26: 2012 Interim Financial Highlights

    Appendix: 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

  27. Slide 27: Pacific Basin Dry Bulk - Handysize

    Appendix: 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 Equiva

  28. Slide 28: 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

  29. Slide 29: 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

  30. Slide 30: 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 3Q12 Trading Update 30

  31. Slide 31: Daily Earnings and Vessel Costs – RoRo

    Appendix: 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,

  32. Slide 32: 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

  33. Slide 33: 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

  34. Slide 34: 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

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