Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping — Investor Presentation (February 2009)
33 slides from Great Eastern Shipping's investor presentation, February 2009
Slide 1: Business & Financial Review
The Great Eastern Shipping Co. Ltd. Business & Financial Review February 2009 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 Dec 31st, 2008
Slide 5: Shipping business-owned fleet
Shipping business-owned fleet 41 ships aggregating 2.93 Mn dwt, avg.age 9.7 years 32 Tankers avg.age 9.2 years (81% in tonnage terms) 12 Crude carriers (6 Suezmax, 6 Aframax) avg.age 8.5 years (2 single hull – both double sided) 18 Product tankers (2 LR1, 11 MR, 5 GP) avg.age 9.5 years (5 si
Slide 6: Shipping business – Inchartered fleet
Shipping business – Inchartered fleet Total Inchartered Fleet : 5 ships (including in subsidiaries) Tankers : 3 9 2 Suezmax Crude Carriers 9 1 Aframax Crude Carrier Dry Bulk : 2 9 2 Supramax Bulk Carriers 6
Slide 7: Committed CAPEX – Shipping Business
Committed CAPEX – Shipping Business Committed Capex of around USD 594 Mn - 10 new building contracts aggregating 0.90 mn. dwt 9FY 2009 - 1 NB, LR 1 Product Tankers (STX Shipbuilding Co. Ltd) 9FY 2010 - 1 NB, LR 1 Product Tankers (STX Shipbuilding Co. Ltd) 9FY 2011 - 1 NB, Kamsarmax Dry Bulk Carrier
Slide 8: Offshore business- Fleet Profile
Offshore business- Fleet Profile ¾ Current Owned Fleet 9 5 Platform Supply Vessels (PSV) JV between Greatship (I) 9 2 Anchor Handling Tug cum Supply Vessel (AHTSV) Ltd & DOF Subsea, Norway - focus on subsea projects ¾ Current Inchartered Fleet in the Indian subcontinent 9 1 Anchor Handling Tug cum S
Slide 9: Committed CAPEX – Offshore Business
Committed CAPEX – Offshore Business ¾ Committed Capex of around USD 759 Mn* 9 FY 2009 - 1 NB 80T AHTSVs (Labroy) 9 1 NB 350 ft Jack Up Rig built at Keppel, inchartered from Mercator. - 1 NB 80T AHTSV (CDL) Expected delivery Q4 FY09 9 FY 2010 - 4 NB 80T AHTSV (1 in CDL, 3 in Labroy) - 4 NB MPSVs (Kep
Slide 10: Committed Capex for the Group
Committed Capex for the Group Total Investment Rs.1008 crs Equity (Rs852 crs) + Pref (Rs.156 crs) G E Shipping Greatship (India) Ltd (Committed CAPEX (Committed CAPEX USD 594 mn) USD 759 mn) Total committed CAPEX of USD 1.3 bn Spread over next two & half years To be financed with a mix of debt & int
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: Financial Review
Financial Review 12
Slide 13: Financial Highlights of Q3 FY09 Performance
Financial Highlights of Q3 FY09 Performance 9mths 9mths (Rs.crs) Q3FY09 Q3FY08 % chg % chg FY09 FY08 Freight & Charter hire 702 604 16% 2,268 1,843 23% Gain on sale of ships 27 49 (45)% 281 244 15% Total Income 729 653 12% 2,549 2,087 22% Total Expenditure 397 314 26% 1,063 963 10% Operating Profit
Slide 14: Q3 FY09 Performance Highlights
Q3 FY09 Performance Highlights Total Income increases by 12% q-o-q Freight & Charter Hire Income higher by 16 % q-o-q despite a fall in operating revenue days by 12.8% q-o-q. Reduction in other income, a marginal increase in interest and some exceptional items bring Net Profit down by 18% q-o-
Slide 15: Earnings Mix
Earnings Mix GE Shipping Average TCY Details Average TCY ($ per day) Q3 FY09 Q3FY08 % change Crude Carriers 37,653 23,564 60% Product Carriers 23,120 19,352 19% Dry Bulk Carriers 30,816 45,148 (32%) Mix of Spot & Time Q3 FY09 Days (in %) Q3 FY08 Dry Bulk 74% Spot % 57% 26% Time % 43% Tankers 53% Spo
Slide 16: Industry Scenario
. Industry Scenario 16
Slide 17: Ship prices on a downslide
Ship prices on a downslide Asset Price Movement (5 yr old) – Amt in US$ mn Timeline- Sep2003 till Jan 26, 2009 160 160 120 120 80 80 40 40 0 0 16/09/2003 VLCC AFRAMAX CAPESIZE PANAMAX(DRY) Source: Baltic Sale & Purchase Assessment 17
Slide 18: World Fleet Supply….the joker in the pack
World Fleet Supply….the joker in the pack 2006 2007 Actual Forecast Forecast 11 mths - 2008 2008 2009 VLCC 3.4% 4.0% 2.9% 3.7% 11.2% Suezmax 7.0% 4.6% 0.9% 3.2% 14.0% Aframax 5.5% 7.3% 4.6% 7.7% 10.2% Panamax 13.8% 12.4% 6.8% 10.8% 10.6% Handymax 7.9% 8..4% 13.0% 8.5% Capesize 9.1% 8.5% 7.6% 9.1% 18
Slide 19: Gross World fleet addition-Shipping
Gross World fleet addition-Shipping World Fleet addition* 2009 2010 2011 21% of world tanker fleet single hull Crude tankers 15.1% 11.3% 11.4% Product tankers 17.7% 10.0% 7.6% Dry bulk carriers 17.1% 22.8% 12.6% *includes only new building from yards Fleet as on Jan-09 Scrapping (in mn dwt) (in mn d
Slide 20: Tanker Market… Resilient so far
Tanker Market… Resilient so far Presence of well capitalised oil companies and first class trader involvement ensured no defaults or crippling credit line withdrawals Relatively “defensive” end use sectors Winter demand and delays Contango storage Oil Usage Breakup Others 14% Transport Indus
Slide 21: Expected Oil Demand - 2009
Expected Oil Demand - 2009 Consumption (in mbpd) Jan-Nov 2008 Jan-Nov 2007 Jan-Nov 2006 China 7.09 7.25 6.78 India 2.6 2.43 2.29 21 Source: JODI Database
Slide 22: Long term growth picture for Oil
Long term growth picture for Oil Oil demand Vs GDP Oil demand growth -16.3 mn bpd from 1970 to 7.0 1980 5.0 - 3.5 mn bpd from 1980 to 1990 3.0 - 10 mn bpd from 1990 to 1.0 2000 -1.0 - 9.2 mn bpd from 2000 to 2008 -3.0 - Except for the oil shock 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991
Slide 23: Dry Bulk Market
Dry Bulk Market Demand for commodities unlikely to pick up in 2009 Tonnage supply to grow despite disruptions in new building deliveries … but a ray of hope… First trigger for a market upturn will be settlement of iron ore prices & active resumption of shipments by China Impact of worldwide
Slide 24: Metallurgical Coal Scenario
Metallurgical Coal Scenario Country 2006 2007 2008(e) 2009(f) 2008/07 2009/08 Imports (mn tonnes) (% chg) EU 27 54 55 54 51 (1.8%) (5.6%) Japan 58 54 54 51 0% (5.6%) China 5 6 7 6 16.7% (14.3%) Korea 20 23 24 25 4.3% 4.2% India 18 23 25 27 8.7% 8.0% Brazil 9 10 12 12 20% 0% World 210 227 228 228 0.4
Slide 25: Thermal Coal Scenario
Thermal Coal Scenario Country 2007 2008(e) 2009(f) 2008/07 2009/08 Imports (mn tonnes) (% chg) China 41.4 36 40 (13%) 11% India 30.7 34 39 11% 15% Japan 128.3 135 130 5% (4%) Korea 65.8 76 81.4 16% 7% Europe 230.5 231.6 233.8 0.5% 1% World 696.5 723.8 746.9 4% 3% Exports (mn tonnes) (% chg) Australi
Slide 26: Steel Scenario
Steel Scenario Country 2006 2007 2008(e) 2009(f) 2008/07 2009/08 Crude Steel Consumption (mn. Tonnes) (% chg) EU 27 213 220 214 202 (2.7%) (5.6%) US 129 123 110 105 (10.6%) (4.5%) Brazil 326 384 427 433 11.2% 1.4% China 384 434 460 493 6% 7.2% Japan 83 84 81 77 (3.6%) (4.9%) Korea 52 56 59 61 5.4% 3
Slide 27: Iron Ore Scenario
Iron Ore Scenario Country 2006 2007 2008(e) 2009(f) 2008/07 2009/08 Iron Ore Imports (mn.tonnes) (% chg) EU 27 170 170 173 163 1.8% (5.8%) Japan 134 139 139 135 0% (2.9%) China 326 384 427 433 11.2% 1.4% Korea 44 47 49 49 4.3% 0% Imports excluding 439 451 462 456 2.4% (1.3%) China World Imports 765
Slide 28: Offshore Market…Still holding strong
Offshore Market…Still holding strong 9 Decline in oil & gas reserves 9 Energy Security concerns high on consumer countries agenda 9 Development and drilling activity in mid to deep water 9 Tenders continuing to be issued for long term work Total Subsea fleet development Source: Offshore Research,Par
Slide 29: Life Cycle of Offshore Fields
Life Cycle of Offshore Fields Source: Bourbon, Feb 2008 29
Slide 30: Evolution of oil and gas Capex and Opex
Evolution of oil and gas Capex and Opex have different volatilities.. Source: Estin & Co, Bourbon- Feb 2008 30
Slide 31: Growth in the worldwide supply fleet vs. rig fleet
Growth in the worldwide supply fleet vs. rig fleet Fleet growth YoY Source: Pareto 31
Slide 32: Offshore Supply Market
Offshore Supply Market OSV Fleet Summary (Nos) AHTSVs PSVs Others Current Fleet* 2,206 1,825 1,714 Orderbook 539 233 207 Aging Fleet % of O/B to current fleet 24% 13% 12% 9 55% of the total fleet * Data as on Dec’08, Source: Clarkson over 25 years old Offshore Installations Delivery Schedule Type Cu
Slide 33: THANK YOU
THANK YOU visit us at www.greatship.com 33
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