Pacific Basin Shipping Limited · HKEX:2343
Pacific Basin Shipping — FY2008 Earnings Presentation
32 slides from Pacific Basin Shipping's earnings presentation, Mar 2, 2009
Slide 1: Annual Results 2008
Stock Code: 2343 Annual Results 2008 2 March 2009
Slide 2: Pacific Basin Overview
Pacific Basin Overview X World’s leading dry bulk owner/operator of modern handysize vessels and a top 10 handymax operator, principally operating in the Asia Pacific region X Operating over 100 ships directly serving major industrial customers X Carrying the dry bulk commodities required for Asia’s
Slide 3: 2008 Results Highlights
2008 Results Highlights X Profits: US$409m (US$472m) y Basic EPS: HK$1.89 (HK$2.34) X Adjusted profit of US$547m after one-off charges and non-cash expenses X Strong balance sheet with cash position of US$1bil and net cash of US$176mil X Time charter equivalent earnings: US$909m (US$700m) X Includes
Slide 4: Measures Taken in 2008
Measures Taken in 2008 We are well positioned to weather the shipping and economic crisis and strengthen the Group: Adjusted Profit US$547m US$472m US$138m XWe have taken charges of US$138m for: Adjustment X One-off advance charter hire payments (US$42m) 409 X Provision for charter-in vessel contrac
Slide 5: Strategy
Strategy X 2008 strategic reorganisation: Handysize and Handymax Towage Roll on Roll off dry bulk businesses X Scale down non-core activities in China ports and maritime services X Strategic capital commitments fully funded; >75% of future capex in Towage and RoRo assets X Continue to build dry bulk
Slide 6: Business Development
Business Development PB Towage Roll on Roll off XOperates modern tugs in X6 newbuildings will deliver in Brisbane, Sydney, Melbourne, 2009 to 2011 including 2 W.Australia, Auckland and the purchase options with total Arabian Gulf. consideration of US$510m Other Operations & Business XProvide harbour
Slide 7: PB Towage
PB Towage PB Towage Head Office Hong Kong PB Towage Middle East PB Towage Australia PB Sea-Tow Dubai Sydney Auckland X Harbour work for containers and bulk shipping lines in Australia X In 2Q08 acquired Sea-Tow, a regional Tug Market project towage operator with a fleet of XThe harbour and specialis
Slide 8: Roll On Roll Off (RoRo)
Roll On Roll Off (RoRo) X 4 newbuildings and 2 purchase option vessels (3,600-3,800 lane metres) set to deliver from 2009 to 2011 X Used for transportation of wheeled cargoes (mostly trucks) which are loaded over a ramp X Proven design, environmental friendly, and suitable for the common short sea t
Slide 9: Other Businesses
Other Businesses Fujairah Bulk Shipping X 50% JV with the Government of Fujairah for supplying aggregates using tugs, barges and handysize ships from Fujairah throughout the Middle East X Secured a land reclamation contract in Fujairah involving the transport of 54 million tonnes of aggregates over
Slide 10: Fleet Profile
Fleet Profile Fleet numbers as at 28 Feb 2008 Total 119 ships Dry Bulk Fleet (excluding short term) – 86 Towage - 27 Short Term Chartered 1 – 28 Average Fleet Age: 6.7 years Tugs: 21 Barge: 6 Handysize: 68 Handymax: 16 Newbuildings 4 Owned 6 Newbuilding 2 Newbuilding 1 Chartered Owned 17 Chartered C
Slide 11: Baltic Exchange Indices
Baltic Exchange Indices The Baltic Dry Index (BDI) The Baltic Handysize Index (BHSI) 25 Feb 2009 25 Feb 2009 1,960 US$ 8,212 (net) $US/day 12,000 48,000 10,000 42,000 36,000 8,000 30,000 6,000 24,000 4,000 18,000 12,000 2,000 6,000 0 0 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jun-06 Dec-06 Jun-07 D
Slide 12: Dry Bulk – 1 Year Time-Charter Rate
Dry Bulk – 1 Year Time-Charter Rate US$/day 180,000 As at 20 Feb 2009 160,000 Capesize 140,000 $28,025 (Jan08: $117,444) 120,000 100,000 Panamax $14,250 (Jan08: $60,088) 80,000 Supramax 60,000 $12,113 (Jan08: $49,756) 40,000 Handysize 1-Year: $9,025 (Jan08: $34,794) 20,000 3-Year: $9,738 (Jan08: $23
Slide 13: Tonnage Demand Contracting
Tonnage Demand Contracting Changes in Tonnage Demand % change YOY 15 13.0% Significant decrease in 4Q 10.7% demand due to financial 9.4% 10 5.6% crisis, lack of trade credit, 3.9% 5 recession and slowdown -10.0% in economic growth 0 globally -5 Long term, the -10 industrialisation of China, India an
Slide 14: Fleet Development
Fleet Development Fleet Development 2007 - 2008 Million Dwt Steady 8% newbuildings delivery 36 8% 7% throughout 2008 32 6.7% 7% 6.6% 6.7% 7.3% and a surge of converted 28 7.0 6.5% 6% 24 0.1 6.2% tankers in 2H08 5% 20 4% 16 Additional supply 3% 12 24.7 23.4 4.0 was partially offset by 2% 8 0.1 1.2 1.
Slide 15: Orderbook
Orderbook Type of Vessels Orderbook as % of Existing Fleet (dwt) Dry Bulk * 70% Fleet orderbook Ave. Age since 3Q08; Capesize 100K + Few new orders placed 106% 11.5 Panamax 60-100K 53% 12.0 Handymax 35K-60K Bank constraints 61% 15.3 limit desire and ability to order Handysize 25,000- 34,999 46% 17.7
Slide 16: Slow Pace of Deliveries
Slow Pace of Deliveries Mil Dwt 2008-2009 Dry Bulk Fleet Delivery 32 2008 Orderbook In 2008, 28 Orderbook: 30.4mil * 23% Reduction 2008 Actual Deliveries VS 24 Actual delivery:23.4mil 20 16 2009 Orderbook: 12 YTD 2009 68.9mil dwt indicates 8 66% reduction 4 Year to date deliveries 2008 and Prelimina
Slide 17: Handysize Age Profile
Handysize Age Profile Orderbook Existing Fleet 25,000-34,999dwt (46%) Total handysize 25,000- 34,999 dwt fleet : 1,284 Vessels (37.8 mil dwt) 20% 17.1% 16.5% 16% 18% ≥ 30+Years 30+ years 18% 12% 9.8% 0-15 years 32% ≥ 25+Years 25-29 years 14% 47% 8% 4% 2.9% 16-24 years 21% 53% > 15+Years 0% 2009 2010
Slide 18: Dry Bulk Carrier Sale & Purchase Market
Dry Bulk Carrier Sale & Purchase Market 2nd-hand five year old handysize vessel price (25K-35K dwt) Clarkson has stopped publishing handysize Last Update from Clarkson: (indeed any dry bulk US$ mil US$ 44 m (3 Oct 08) carrier) vessel values 55 50 Market turbulence has 45 affected secondhand 40 vesse
Slide 19: 2008 Financial Highlights
2008 Financial Highlights 2008 2007 TCE Earnings (US$m) 909.4 700.5 Vessel disposal gains 149.8 137.4 Reported net profit 409.1 472.1 One-off termination payments 41.8 - Provision for onerous charter contracts 53.9 - Net mark-to-market expenses for equity investment 23.1 - Impairment for vessels to
Slide 20: Results – Handysize Freight & Charter-hire
Results – Handysize Freight & Charter-hire Drivers of the results 1H08 2H08 2008 2007 % Change Revenue days (days) 11,540 11,230 22,770 20,100 +13% TCE earnings (US$/day) 32,460 25,950 29,250 23,200 +26% Owned + chartered cost (US$/day) 12,840 13,590 13,210 10,240 +29% Contribution (US$m) 226.4 138.
Slide 21: Results – Handymax Freight & Charter-hire
Results – Handymax Freight & Charter-hire Drivers of the results 1H08 2H08 2008 2007 % Change Revenue days (days) 2,900 2,790 5,690 4,870 +17% TCE earnings (US$/day) 46,100 43,590 44,870 30,040 +49% Owned + chartered cost (US$/day) 32,940 38,120 35,460 23,050 +54% Contribution (US$m) 38.2 15.3 53.5
Slide 22: Daily Vessel Costs - Handysize
Daily Vessel Costs - Handysize As at 31 Dec 08 Owned Chartered US$/day Blended US$13,210 (2007: US$10,240) $16,820 530 15,000 Opex $12,850 Depreciation 12,500 620 Finance cost $9,410 Direct Overhead 10,000 $8,640 Charter-hire 1,160 1,080 +33% 7,500 1,660 12,230 16,290 1,720 5,000 2,670 2,590 2,500 3
Slide 23: Lower Future Charter Expenses
Lower Future Charter Expenses 2 adjustment items: One-off early termination Provision for onerous payments US$41.8 million charter contracts for new lower cost charters US$53.9 million PB Handysize PB Handymax Operating leases Operating leases US$/day Before After Days Before After Days Year 2009 15
Slide 24: Impact of Financial Instruments
Impact of Financial Instruments Year ended 31 December US$ mil Realised Unrealised 2008 2007 Net Gains / (Losses) Interest rate swap contracts (0.8) (5.9) (6.7) (1.4) Bunker swap contracts 11.8 (59.0) (47.2) 35.4 Forward freight agreements 5.2 71.8 77.0 (51.9) 16.2 6.9 23.1 (17.9) Completed in perio
Slide 25: Balance Sheet
Balance Sheet 31 Dec 08 31 Dec 07 US$mil Net book value of fixed assets 1 794.6 755.9 Gross borrowings 847.8 660.2 Cash 1,023.7 649.5 Net cash / (borrowings) 175.9 (10.7) Shareholder's equity 1,218.7 867.6 Net cash (borrowings) / Fixed assets 21.8% (1.4)% Net cash (borrowings) / Shareholder's equity
Slide 26: Borrowings and Capex
Borrowings and Capex US$ mil 350 324 Funded from 291 300 US$1,024 million cash, 250 225 new loans, and future operating cashflows 200 150 91 100 57 69 44 47 33 45 50 34 32 32 18 16 20 8 14 15 17 0 2009 2010 2011 2012 2013 2014 2015 2016-2018 Capex (US$563mil) Bank borrowings (US$332mil) : 2012 - 201
Slide 27: Capex and Combined Value by Vessel Types
Capex and Combined Value by Vessel Types A Combined View of Vessels Commitments Vessel Carrying Values and Commitments US$ mil US$ mil Total US$563 mil Total US$1,392 mil 350 737 291 750 300 4 130 600 78 250 225 533 25 200 450 114 265 150 529 403 300 100 26 47 150 122 50 30 25 13 60 130 22 22 79 0 0
Slide 28: Cashflow
Cashflow US$ mil 2008 2007 Operating cash inflows 459.1 314.0 Investing cash (out) / inflows (244.5) 102.0 - Vessels & other fixed assets related payments (378.1) (259.4) - Sales of vessels 313.5 365.9 - Jointly controlled entities related payments (84.7) (1.5) - Purchase of available-for-sale finan
Slide 29: Earnings Coverage
Earnings Coverage Earnings coverage as at 20 February 2008 Handysize Handymax ^ Revenue Days Fixed 25,000 Unfixed 22,770 days 22,090 days 2009 Total 20,000 Combined Cover: 72% * 15,000 10,000 2010 Cover: US$29,250 US$16.950 5,690 days 3,680 days Handysize: 28% 5,000 100% 60% US$44,870 Handymax:124%
Slide 30: Counterparty Risk Management
Counterparty Risk Management Customer XDiversified customer base (over 200 customers) & ~100 different commodities carried X95%-100% of contracted dry bulk freight is payable upon completion of loading XFixing long term contracts with large, often blue chip commodity companies with a successful trac
Slide 31: Outlook
Outlook X Focus on three core segments of dry bulk, towage, and RoRo X Solid balance sheet – US$176 million net cash, and shareholders’ equity of US$1.2 billion X 60% of 2009 handysize days covered at almost US$17,000 per day; current spot market stands at US$7,600 per day net. 2009 total combined c
Slide 32: 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,
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