Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping — Investor Presentation (August 2014)
38 slides from Great Eastern Shipping's investor presentation, August 2014
Slide 1: Business & Financial Review August 2014
The Great Eastern Shipping Co. Ltd. Business & Financial Review August 2014 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 subsidiary Greatship (India) Limited - Logistics Crude Tankers Product Tankers - Drilling Dry bulk 3
Slide 4: Company at a glance
Company at a glance India’s largest private sector Shipping Company Diverse asset base with global operations Completed 66 years of operations 30 years of uninterrupted dividend track record Shareholding Pattern as on June 30, 2014 Public FIIs 22% 26% Govt/FI 15% Promoters Bodies 31% Corporate 6% 4
Slide 5: Shipping business-owned fleet
Shipping business-owned fleet 30 ships aggregating 2.42 Mn dwt, avg.age 10.0 years 22 Tankers avg.age 10.6 years - 8 Crude carriers (4 Suezmax, 4 Aframax) avg.age 11.2 years - 12 Product tankers (4 LR1, 7 MR, 1 GP) avg.age 7.9 years - 2 Very Large Gas Carrier avg.age 22.0 years 8 Dry bulk carriers a
Slide 6: Shipping business- CAPEX plan
Shipping business- CAPEX plan Vessels on Order Vessel Yard CAPEX: ~ USD 180 mnExpected Total committed –ADD YR Delivery WISE 1 Medium Range Product TankerCAPEX BRK UP) STX Group Q4FY16 2 Kamsarmax Dry Bulk Carriers Tsuneishi Shipbuilding H1FY16 3 Kamsarmax Dry Bulk Carriers Jiangsu New Yangzi Shipbu
Slide 7: Asset Price Movement (5 yr old)- Tankers
100 120 140 160 180 0 20 40 60 80 Source: Clarkson 2002-01 2002-05 2002-09 2003-01 VLCC 2003-05 2003-09 2004-01 2004-05 2004-09 2005-01 Suezmax 2005-05 2005-09 2006-01 2006-05 MR 2006-09 2007-01 2007-05 2007-09 2008-01 2008-05 2008-09 Amt in US$ mn 2009-01 2009-05 - 20 40 60 80 2009-09 2010-01 Timel
Slide 8: Asset Price Movement (5 yr old) – Dry Bulk
- Source: Clarkson 20 40 60 80 100 120 140 160 2002-01 2002-05 2002-09 2003-01 2003-05 2003-09 Capesize 2004-01 2004-05 2004-09 2005-01 2005-05 Panamax 2005-09 2006-01 2006-05 2006-09 2007-01 2007-05 2007-09 Supramax 2008-01 2008-05 2008-09 Amt in US$ mn 2009-01 2009-05 - 20 40 60 2009-09 Timeline-
Slide 9: Asset Price Movement
Asset Price Movement 20 year High /Low: (5 year old assets) (Amt in $mn) High Low Current Tankers 165 49 VLCC 74 (2008) (1994) 105 32 Suezmax 49 (2008) (1993) 46 20 MR 26 (2007) (1999) Dry Bulk 155 25 Capesize 47 (2008) (1999) 92 14 Panamax 24 (2007) (1999) 75 13 Supramax 25 (2007) (1998) 9 Source:
Slide 10: BDTI & BCTI Movement (Jan 2001 to July 2014)
BDTI & BCTI Movement (Jan 2001 to July 2014) BDTI BCTI 3500 Seasonal uptick in BDTI led by Winter demand, 3000 strong demand pull due to Chinese SPR program and favorable Brent Dubai Swap 2500 2000 1500 1000 500 0 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Ju
Slide 11: Non OECD driving oil demand
Non OECD driving oil demand 11 Source: Industry Reports
Slide 12: Its about demand now...not peak oil supply!!!
Its about demand now...not peak oil supply!!! 12 Source: Industry Reports
Slide 13: Crude Oil Trade – Changing patterns...
Crude Oil Trade – Changing patterns... Oil demand sourcing matrix changing Oil supply dynamics changing China & India in forefront US – Shale revolution US refineries operating at record utilization Canadian- Heavy sands Refinery closures in OECD Europe, Iran – Uncertainty on Sanctions Australia, Ja
Slide 14: Crude Oil Trade – Changing patterns...
Crude Oil Trade – Changing patterns... OIL OIL OIL OIL OIL OIL OIL OIL OIL OIL 14 Source: Industry Reports
Slide 15: Significant new Refining capacity additions in Asia and Middle East
Significant new Refining capacity additions coming up in Asia and Middle East… Global refinery crude distillation capacity set to rise by 8.6 mb/d from 2013 to 2019 Asia-Pacific to account for about ~50% and M.E ~26%. Global crude processing capacity is forecast to increase by 7.7 mb/d, reaching nea
Slide 16: Leading to overcapacity, potential closures in the OECD region
Leading to overcapacity, potential closures in the OECD region, lower utilization along with scaling back of certain planned expansions Refining Capacity Rationalization Chinese CDU expansions vs. previous projections Expansion in Latin America could witness delays China stalls new projects on loomi
Slide 17: Growing Product trade… Increasing volumes, distances and triangulation opportunities
Growing Product trade… Increasing volumes, distances and triangulation opportunities Japanese refinery shutdowns Chinese refinery expansion being delayed due to weak domestic demand growth 17 Source: Industry Reports
Slide 18: BDI Movement (Jan 2001 to July 2014)
BDI Movement (Jan 2001 to July 2014) 14000 China announces 12000 $586 bn stimulus 10000 Cargo growth but Robust 2008 market record NB growth in iron 8000 crash, BDI deliveries ore imports dropped by 94% from China 6000 4000 2000 0 Dec-01 May-02 Oct-02 Mar-03 Aug-03 Jan-04 Jun-04 Nov-04 Apr-05 Sep-05
Slide 19: Seaborne Bulk Trade … growing steadily
Seaborne Bulk Trade … growing steadily 5000 Global dry bulk seaborne trade reached 4.3 bn tons in 2013 4500 4000 Contribution to seaborne trade growth by commodity 3500 3000 40% 36% 2500 34% 35% 2000 30% 1500 24% 25% 1000 20% 500 15% 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 10% (E) 5% Mn.
Slide 20: Dry Bulk Trade …Driven by Iron Ore Volumes
Dry Bulk Trade …Driven by Iron Ore Volumes Until 2016, iron ore seaborne trade will be a function of available international supplies Additional supplies Australia – 142 mt Brazil- 82 mt Other 61 mt Post 2016, iron ore seaborne trade to be directed by demand and price arbitrage 20 Source: Industry R
Slide 21: Dry Bulk Trade …Declining Chinese iron ore quality
Dry Bulk Trade …Declining Chinese iron ore quality Imported Iron Ore Steel Output 457 mn tonnes 2014 H1 409 2013 H1 385 401 2013 820 775 2012 744 717 2011 686 683 2010 619 637 2009 628 572 2008 444 503 2007 383 489 2006 326 419 2005 275 353 2004 208 283 2003 148 222 21 Source: Industry Reports
Slide 22: Dry Bulk Trade …Lack luster Chinese coal imports
Dry Bulk Trade …Lack luster Chinese coal imports take the sheen off !!!...India to become the growth driver.. India coal imports Million tonnes Coal Imports 180 170 160 150 140 130 120 110 100 2006 2007 2008 2009 2010 2011 2012 2013 2014P Source: Clarkson 22 Source: Industry Reports
Slide 23: Dry Bulk Trade …Indonesian bauxite & nickel ore exports plunged
Dry Bulk Trade …Indonesian bauxite & nickel ore exports plunged to zero following the ban 23
Slide 24: World Fleet Growth
World Fleet Growth 800 700 Dry Bulk Crude Product 600 500 400 300 200 100 0 Mn.dwt 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Fleet growth 2002-2013 (mn dwt) 2003 2008 2013 % change Fleet % change (2013 over 2003) (1st August’14) over 2013 Dry 302 418 724 240% 746 3.0% Crude 229 287
Slide 25: … Fleet expected to grow
… Fleet expected to grow World Fleet Fleet CY2014 CY2015 CY2016+ addition* (1st August’14) (in mn dwt) Crude tankers 364 3% 3% 7% Product tankers 141 4% 6% 7% Dry bulk carriers 746 5% 9% 9% *includes only new building from yards … but high slippages may happen 25 Source: Clarkson
Slide 26: Scrapping… too little to cheer
Scrapping… too little to cheer Scrapping as % of world fleet (year wise) Fleet as on Scrapping 1st Aug’14 (Jan-Jul) Vessel CY2010 CY2011 CY2012 CY2013 2014) Category (in mn dwt) (in mn dwt) 364 5.0 Crude 2% 2% 3% 2% 141 1.1 Product 5% 2% 2% 2% 746 8.6 Bulk 1% 4% 5% 3% Require acceleration in scrappi
Slide 27: Greatship (India) Limited Business & Financial Review
Greatship (India) Limited (a 100% subsidiary) Business & Financial Review August 2014 27
Slide 28: Offshore business- Fleet Profile
Offshore business- Fleet Profile The Greatship Group Current Owned Fleet 3 Jack Up Rigs (350ft) 4 Platform Supply Vessels (PSV) 9 Anchor Handling Tug cum Supply Vessels (AHTSV) 2 Multipurpose Platform Supply and Support Vessels (MPSSV) 6 Platform / ROV Support Vessels (ROVSV) On Order: 1 Jackup Rig
Slide 29: Greatship’s Modern & Technologically Advanced Fleet
Greatship’s Modern & Technologically Advanced Fleet Young Fleet Young fleet with an average age of approx. 4 years by FY 2013-14 - Higher utilization rates Revenue Demand shifting to modern vessels, especially as Efficiencies - Minimum down time safety becomes a major concern for oil companies Techn
Slide 30: Offshore Service Value Chain
Offshore Service Value Chain Exploration Development Production Length of - 3 to 5 years - 2 to 4 years - 5 to 55 years Typical Cycle - Collection of survey data - Construction & installation of - Management of oil & gas production platforms, production - Analysis & interpretation Description pipeli
Slide 31: E&P Activities – Steady Growth
E&P Activities – Steady Growth Global E&P Spending 2014 E&P spending breakup - Global E&P spending to increase by 4% - National Oil Companies remain the in 2014 largest contributor to the E&P spending - However, growth in offshore spend could - Energy security: key concern for every be flat nation 3
Slide 32: Global Fleet Supply -Offshore
Global Fleet Supply -Offshore Average age of existing jackup rig fleet is about 21 years (Nos) Jackup Rigs AHTSVs PSV/Supply Current Fleet 496 2,029 1,416 Orderbook 142 150 362 % of O/B to current fleet 29% 7% 26% - With increased focus on safety and efficiency, utilization for modern assets expecte
Slide 33: Financial Highlights Q1 FY 2015
FINANCIAL HIGHLIGHTS Q1 FY 2015 33
Slide 34: Q1FY 2015 Financial Highlights
Q1FY 2015 Financial Highlights Standalone Key Figures Consolidated Q1 FY15 Q1 FY14 2013-14 (Amount in Rs. crs) Q1 FY15 Q1 FY14 2013-14 Income Statement 494 548 1,780 Revenue (including other income) 906 919 3,333 218 296 781 EBITDA (including other income) 469 524 1,677 88 142 205 Net Profit 223 244
Slide 35: Q1FY 2015 Financial Highlights
Q1FY 2015 Financial Highlights Standalone Key Figures Consolidated Q1 FY15 Q1 FY14 2013-14 Q1 FY15 Q1 FY14 2013-14 44.22% 53.98% 43.86% EBITDA Margin (%) 51.72% 56.99% 50.32% 7.19% 11.32% 4.17% Return on Equity (ROE) (%) 12.90% 15.04% 8.75% 6.61% 9.06% 4.99% Return on Capital Employed (ROCE) (%) 9.1
Slide 36: Q1 FY 2015 Performance Highlights
Q1 FY 2015 Performance Highlights Breakup of revenue days Revenue Days Q1’FY15 Q1’FY14 Owned Tonnage 2,602 2,691 Inchartered Tonnage 133 27 Total Revenue Days 2,735 2,718 Total Owned Tonnage (mn.dwt)* 2.37 2.43 * As on 30th June, 2014 Mix of Spot & Time Days (in %) Q1’FY15 Q1’FY14 Average TCY Detail
Slide 37: Book Value & Net Asset Value (NAV) comparison
Book Value & Net Asset Value (NAV) comparison Last 4 quarters Consol. Book Consol. NAV Value (Rs. Per share) (Rs. Per share) June 2014 468 560 March 2014 449 550 December 2013 454 539 September 2013 444 532 37
Slide 38: THANK YOU
THANK YOU visit us at www.greatship.com 38
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