Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping — Debt Investor Presentation (September 2016)
24 slides from Great Eastern Shipping's debt investor presentation, September 2016
Slide 1: The Great Eastern Shipping Co. Ltd. Debt Investors Meet
The Great Eastern Shipping Co. Ltd. Debt Investors Meet September 2016
Slide 2: Corporate Profile
Corporate Profile The Great Eastern Shipping Company Offshore Shipping (Bulk) (Through wholly-owned subsidiary Greatship (India) Limited) Tankers - Crude Dry Bulk Logistics Drilling - Products India’s largest private sector shipping company with over 68 years of experience 2
Slide 3: Shareholding Pattern
Shareholding Pattern Shareholding Pattern as on June 30, 2016 FII 23% Promoters 30% Govt/FI 19% Public 21% Corporate Bodies 7% 3
Slide 4: GESCO – Some Historical Facts
GESCO – Some Historical Facts Incorporated in 1948 Shipping and Offshore: the only businesses of the promoters One of the few shipping companies globally to have not shown a loss in the last 35 years. Reported annual loss only twice in our 68 year history Total Capital Employed for group as
Slide 5: GESCO – Shipping Fleet
GESCO – Shipping Fleet Tankers : Nos. DWT (mn Tonnes) Suezmax : 04 0.61 Aframax : 03 0.32 Product tankers : 15 0.83 Gas carrier : 02 0.10 TOTAL : 24 1.86 Dry Bulk Nos. DWT (mn Tonnes) Capesize : 01 0.18 Kamsarmax : 07 0.57 Supramax : 05 0.27 TOTAL : 13 1.02 GESCO Fleet Nos. DWT (mn Tonnes) TOTAL 37
Slide 6: Greatship India Ltd
Greatship India Ltd In 2005, Great Offshore was demerged as a separate company Greatship (India) Limited was setup in 2006 & it started with 2 second hand vessels GIL is a 100% subsidiary of GESCO Currently, GIL has 4 Jackup Rigs & 21 Offshore Support veesels All operations (except strateg
Slide 7: Offshore Business – Fleet Profile
Offshore Business – Fleet Profile The Greatship Group Current Owned Fleet High Fleet Utilization • 4 Jack Up Rigs (350ft) Extent of coverage of • 5 Platform Supply Vessels (PSV) fleet's operating days Category (per cent) (FY17) • 8 Anchor Handling Tug cum Supply Vessels (AHTSV) PSV 48 ROVSV 69 • 2
Slide 8: Greatship’s Modern & Technologically Advanced Fleet & High Visibility
Greatship’s Modern & Technologically Advanced Fleet & High Visibility Young Fleet Young jack-up fleet with an average age of approx. 4.5 years - Customer stickiness Demand shifting to modern vessels, Revenue - Higher visibility especially as safety becomes a major Efficiencies concern for oil co
Slide 9: GESCO Business Focus: Profitably Managing Cycles
GESCO Business Focus Profitably Managing Cycles 9
Slide 10: How We Approach Risk
How We Approach Risk A robust risk management process has been in place for many years We continuously endeavor to identify different risks that impact various aspects of our business and put in place mitigation strategies for the same Special emphasis is laid on periodic review of the risks a
Slide 11: Baltic Dry Index (Jan 2000 – Jul 2016)
Baltic Dry Index (Jan 2000 – Jul 2016) Baltic Dry Index 12,000 10,000 8,000 6,000 4,000 2,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Dry bulk rates remain close to historic lows Source – Industry Reports 11
Slide 12: Tankers – Avg. Earnings
/day USD 20,000 40,000 60,000 80,000 100,000 120,000 0 1990 1991 1992 1993 1994 1995 1997 1998 1999 2000 2001 2002 2004 2005 2006 2007 2008 2009 2011 Tankers – Avg. Earnings 2012 2013 2014 2015 12
Slide 13: Suezmax Tankers – Asset Prices (5 yr Old)
Mn USD 20 60 80 40 0 100 120 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Suezmax Tankers – Asset Prices (5 yr Old) 2016 13
Slide 14: Capesize – Asset Prices (5 yr Old)
Mn USD 40 60 80 20 0 100 120 140 160 180 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Capesize – Asset Prices (5 yr Old) 2015 2016 14
Slide 15: Key Strategies for Survival
Key Strategies for Survival Keep the cost of acquisition low and actively make capital allocation decisions Time charter coverage/revenue visibility – with caution! Low leverage Provide risk capital for bad markets 15
Slide 16: Capital Allocation – One of the Keys to Our Success
Capital Allocation – One of the Keys to Our Success The ability to dynamically change allocations between different markets and asset types to ensure best returns on scarce capital Between 2006 and 2008 (boom years for the shipping business) we took about US$ 250 mn out of shipping and put it in
Slide 17: Capesize – Asset Prices (5 yr Old)
Capesize – Asset Prices (5 yr Old) 180 160 140 Median-35.58 120 100 80 60 40 20 0 USD 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Mn Capesize 5 Year Old Secondhand Prices Median 17
Slide 18: Net Debt/Equity & Total Capital Employed
Net Debt/Equity & Total Capital Employed 10,000 0.80 9,000 0.70 8,000 0.60 7,000 6,000 0.50 5,000 0.40 4,000 0.30 3,000 0.20 2,000 1,000 0.10 - 0.00 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 INR Cr Total Capital Employed N
Slide 19: Cash Debt Service Cover Ratio
Cash Debt Service Cover Ratio 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 - 1 2 3 4 5 6 7 8 9 19
Slide 20: Find the Balance Between Risk and Return
Find the Balance Between Risk and Return To ensure that we are never in financial distress, and to meet our financial return objectives, we have to: Ensure ability to always meet financial obligations, even in the worst of markets Maintain capability to buy even when cash flows are very poor A
Slide 21: Risk Capital – Basic Example
Risk Capital – Basic Example Consider a vessel with an average cash cost (including repayments) over the next 3 years – US$ 20,000/day Expected ‘low case’ spot rates (average for 3 years) – US$ 12,000 /day (this is based on the worst 3 year period in the last 25 years) Vessel can be put on 3 y
Slide 22: Ship Financing - Unique Features
Ship Financing - Unique Features USD is the natural borrowing currency as the assets and cashflows are USD denominated across the industry Traditional Shipping loans are one of the cheapest across industries as they are asset backed Ships are one of the most liquid assets in the world Shipping l
Slide 23: Debt Finance Options
Debt Finance Options Normal Borrowing Options External Commercial Borrowing Export Credit Agencies Opportunistic Borrowing Options FCNR loans NCDs (swapped to USD fixed) Short Term Buyers Credit 23
Slide 24: THANK YOU
THANK YOU visit us at www.greatship.com 26
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