Pacific Basin Shipping Limited · HKEX:2343

Pacific Basin Shipping — Q3 2013 Earnings Presentation

31 slides from Pacific Basin Shipping's earnings presentation, Oct 18, 2013

  1. Slide 1: 3Q13 Trading Update

    Ee Pacific Basin —— 30 201 Pp’ - a “Trading Upda 4 18 Oct 2013

  2. Slide 2: 2013 Third Quarter Highlights

    2013 Third Quarter Highlights Pacific Basin Dry Bulk  Our 3Q average daily earnings (net): Handysize: US$9,550/day on 14,410 revenue days Handymax: US$10,420/day on 6,090 revenue days  Handysize spot market rates averaged US$7,500/day net  Our fleet scale and cargo-focused business model continue

  3. Slide 3: Pacific Basin Dry Bulk Earnings Cover and Fleet

    Pacific Basin Dry Bulk Earnings Cover as at 3Q13 Trading Update Handysize Handymax Uncovered Strong dry bulk 19,010 Covered 47,620 business model Days 1Q-3Q Completed Days enables us to 37,560 93% 4Q 4Q 72% US$12,120 outperform the spot Days 13,430 64% US$9,500 30,400 Days Revenue Days market: 4Q 73

  4. Slide 4: Dry Bulk Market Information

    Dry Bulk Market Information  Gradual upward trend in Handysize rates since low point in 4Q 2012  Overall dry bulk market developments dominated by strong increase in Capesize rates – despite significant expansion of Capesize capacity over past 3 years  Seasonal improvement towards the fourth quar

  5. Slide 5: Dry Bulk Demand

    Dry Bulk Demand Dry Bulk Effective Demand Chinese Minor Bulk Imports % change YOY Million tonnes 30 16 YTD Imports have increase 19% YOY 25 12 20 8 7.3 5.5 15 5.0 4 10 0 5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2013 2012 2011 2010 -4 2006 2007 2008 2009 2010 2011 2012 1Q13E 2Q13E China impo

  6. Slide 6: Global Dry Bulk Fleet Development

    Global Dry Bulk Fleet Development Handysize Age Profile (25,000-39,999 dwt) Net fleet growth: Handysize Dry Bulk overall 2,138 vessels (68.9m dwt) 1 Jul – 30 Sep +0% +1% YTD +0.95% +5.6% 30+ years 5% Dry bulk fleet development YTD: 25 - 29 years 12%  New deliveries: 47m tonnes YTD 16- 24 years  Sc

  7. Slide 7: Dry Bulk Orderbook

    Dry Bulk Orderbook Handysize Orderbook 350 vessels (12.4m dwt) m Dwt 8 10.4%  New orders YTD are up 110% YOY (from low base in 2012) – 7 mainly Capesize & large Handymax 39% 6 Shortfall  Scheduled orderbook for 2015/16 deliveries remains relatively 5 6.6% 6.4% 5.7% small… but continued ordering at

  8. Slide 8: Pacific Basin Dry Bulk – Outlook

    Pacific Basin Dry Bulk – Outlook  China’s continued strong demand for minor  Excessive newbuilding capacity, especially in bulks despite slower economic growth China, and competition from shipyards to win  Continued US economic recovery and reviving new orders industrialisation in North America 

  9. Slide 9: PB Towage

    PB Towage 3Q13 Performance PB Towage Fleet: 50 vessels (as at 15 Oct 2013) Offshore Towage  OMSA JV’s contract to supply marine logistics services to Gorgon was extended to Dec 2015  Expect a gradual and phased decline in construction work scope as the project approaches its production phase  Sec

  10. Slide 10: PB Towage – Outlook

    PB Towage – Outlook  Growth in Australian bulk exports and port  Volatile global markets and hesitation in global infrastructure development economic recovery, amplified by a credit squeeze in China, impacting growth in dry bulk trades and  Exclusive licences in a number of bulk ports up for Aust

  11. Slide 11: Daily Vessel Costs – Handysize

    Daily Vessel Costs – Handysize As at 30 June 2013 Charter-hire Finance cost Inward Charter Depreciation Commitments Opex Owned Chartered US$/day Including finance lease vessels Daily charter hire rates & days Blended US$8,280 (FY2012: US$8,910) 2013-2015 12,000 $10,520 $10,080 10,000 9,340 $8,990 8,

  12. Slide 12: Balance Sheet

    Balance Sheet PB PB Discontinued US$m Dry Bulk Towage Treasury RoRo 30 Jun 13 31 Dec 12 Vessels & other fixed assets 1,250 181 - - 1,436 1,270 Total assets 1,501 249 544 32 2,347 2,470 Long term borrowings 466 25 366 - 857 931 Total liabilities 616 39 373 3 1,051 1,138 Net assets 885 210 171 29 1,29

  13. Slide 13: Borrowings and Capex

    Borrowings and Capex The Group had cash balances of US$442m, borrowings of US$857m and a net borrowings ratio of 29% against the Net Book Value of property, plant and equipment US$m As at 30 June 2013 250 230 200 Redeemable in Apr 2014 167 150 140 124 Redeemable in Oct 2016 100 83 84 77 65 50 31 38

  14. Slide 14: Cash Flow

    Cash Flow As at 30 June 2013 1H2013 Sources and Uses of Group Cash Flow US$ m 900 Operating cash flow US$34.5m EBITDA US$59.4m 800 +35 +754 2H13 cash levels expected to be affected by: 700  Drawdown from US$67 million unutilised ECA facility -76  New loan facilities to be secured using our existin

  15. Slide 15: Our Outlook and Strategy

    Our Outlook and Strategy We remain focused on growth  Expect seasonally stronger demand & reduced newbuilding deliveries late in the year to support stronger Handysize and Handymax spot market in 4Q 2013… before seasonal softening early in the new year  Handysize & Handymax spot markets to continu

  16. Slide 16: 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,

  17. Slide 17: 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

  18. Slide 18: How we create value

    Appendix: How we create value Our large, flexible Fleet Our strong corporate profile  Large scale, high-quality dry bulk fleet  Founded in 1987  Interchangeable nature provides flexibility  Strong balance sheet enhancing our to customers and ability to optimise profile as a preferred counterpart

  19. Slide 19: 2013 Interim Results – Group Highlights

    2013 Interim Results – Group Highlights 1H13 1H12 Underlying Profit US$13.6m US$3.2m EBITDA US$59.4m US$53.7m Underlying Profit US$m Net Profit / (Loss) US$0.3m US$(195.9)m 13.6 Earnings per Share HK¢0.1 HK¢(79) Cash Position US$442.3m US$753.5m (31 Dec) 3.2  Group results were impacted by: 1H12 1H

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

    Appendix: Pacific Basin Dry Bulk – Diversified Cargo Our Dry Bulk Cargo Volumes in 1Q- 3Q13 Energy AgriculturalProducts Coal 5% 12% Grains & Agriculture Products 16% Petcoke 7% Fertiliser 9% 29% Sugar 4% Metals Alumina 5% 18% Ores 7% 36.5 Concentrates& Other Metals 6% Millio n Tonnes ConstructionMat

  21. Slide 21: 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.

  22. Slide 22: 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 importer China Iron Ore Sourcing of coal in 1H13 for Steel Production % of total dry m tonnes bulk trade m tonnes m tonnes 400 1,400 1,200 32% 1,250 29% 28% 350 1,134 1,200 27% 26% 313 900

  23. Slide 23: 2013 Interim Financial Highlights

    2013 Interim Financial Highlights US$m 1H13 1H12 Segment net profit 25.8 18.2  Treasury (4.3) (0.9)  Discontinued Operations - RoRo (0.8) (8.5)  Non direct G&A (7.1) (5.6) Underlying profit 13.6 3.2  Unrealised derivative expenses (3.5) (9.1)  RoRo vessel exchange loss & impairment charge (8.3)

  24. Slide 24: Pacific Basin Dry Bulk

    Pacific Basin Dry Bulk Handysize 1H13 1H12 Change Revenue days (days) 23,740 19,210 +24% TCE earnings (US$/day) 9,290 10,540 -12% Owned + chartered costs (US$/day) 8,280 9,250 -11% Handysize contribution (US$m) 22.4 22.8 -2% Handymax contribution (US$m) 4.3 (1.4) +407% Post Panamax contribution (US$

  25. Slide 25: Pacific Basin Dry Bulk – Handymax

    Appendix: Pacific Basin Dry Bulk – Handymax 1H13 1H12 Change Revenue days (days) 9,050 6,940 +30% TCE earnings (US$/day) 10,570 11,520 -8% Owned + chartered costs (US$/day) 10,060 11,720 -14% Handymax contribution (US$m) 4.3 (1.4) +407% Post Panamax contribution (US$m) 2.9 2.8 +4% Total contribution

  26. Slide 26: Daily Vessel Costs – Handymax

    Appendix: Daily Vessel Costs – Handymax Charter-hire As at 30 June 2013 Finance cost Depreciation Inward Charter Opex Commitments Owned Chartered US$/Day Daily charter hire rates & days Blended US$10,060 (FY2012: US$11,240) 2013-2015 14,000 $13,720 $12,880 12,000 11,430 10,250 $10,190 10,000 8,550 8

  27. Slide 27: Towage Segment Operating Performance Before Overheads

    Appendix: Towage Segment Operating Performance Before Overheads As at 30 June 2013 US$m % 30 15 12.0% Operating performance US$22.3m 25 11.5% 12 22.3 22.1 Direct overheads US$(9.7)m 20 9 Segment net profit US$12.6m 15 39.4 15.2 15.3 6 EBITDA US$19.8m 10 3 5 6.4 6.2 0 0.5 0.8 0 1H12 1H13 Offshore & I

  28. Slide 28: Capex and Combined Vessel Value

    Appendix: Capex and Combined Vessel Value As at 30 June 2013 A Combined View of Vessels Commitments Vessel Carrying Values and Commitments Total US$298m Total US$1,735m US$m US$m 180 167 1,600 1,555 160 298 1,400 140 52 1,200 120 113 100 1,000 84 80 800 20 60 600 1,144 115 40 29 400 3 64 18 20 180 2

  29. Slide 29: PB RoRo

    Appendix: PB RoRo US$ Million 2H13 2014 2015 Total Interest Income - Treasury 3.8 6.1 2.9 12.8 Exchange Losses - Unallocated - (5.0) - (5.0) Total 3.8 1.1 2.9 7.8  Considered a discontinued operation  2012: Agreed sale of all 6 RoRos to Grimaldi for Eur153m (approx. US$188m)  All 6 vessels to be

  30. Slide 30: 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

  31. Slide 31: 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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