Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping — Q1 FY2023 Earnings Presentation
50 slides from Great Eastern Shipping's earnings presentation, Aug 1, 2022
Slide 1: The Great Eastern Shipping Co. Ltd.
The Great Easte Shipping Co. Ltd.
Slide 2: Forward looking statements disclaimer
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 directions, prospects and f
Slide 3: Financial Year Q1FY23
FINANCIAL YEAR Q1FY23 01 Aug 2022
Slide 4: Reported Financial Highlights
REPORTED FINANCIAL HIGHLIGHTS GE Shipping Q1FY23 consolidated Net Profit at INR 457 Cr Declared 1st interim dividend of INR 5.40/Share for FY2023 Standalone Key Figures Consolidated Q1FY23 Q1FY22 (Amount in INR Cr) Q1FY23 Q1FY22 Income Statement 1,165 664 Revenue (including other income) 1,398 801 6
Slide 5: Normalized Financial Notes
NORMALIZED FINANCIAL NOTES 1) The impact of the exchange rate on foreign currency loans and current assets and liabilities, including cash and bank balances, has been removed 2) NCD & Currency Swap: • Funds raised through NCDs have been swapped into USD using INR-FCY swaps, thus creating synthetic f
Slide 6: Normalized Financial Highlights
NORMALIZED FINANCIAL HIGHLIGHTS GE Shipping Q1FY23 consolidated Net Profit at INR 509 Cr Declared 1st interim dividend of INR 5.40/Share for FY2023 Standalone Key Figures Consolidated Q1FY23 Q1FY22 (Amount in INR Cr) Q1FY23 Q1FY22 Income Statement 1,165 664 Revenue (including other income) 1,398 801
Slide 7: Normalized Financial Highlights
NORMALIZED FINANCIAL HIGHLIGHTS Standalone Key Figures Consolidated Q1FY23 Q1FY22 Q1FY23 Q1FY22 Key financial figures 27.55% 8.70% **Return on Equity (ROE) (%) 24.64% 4.22% 18.88% 6.59% **Return on Capital Employed (ROCE) (%) 16.76% 3.99% 0.54 0.64 Gross Debt/Equity (x) 0.58 0.68 0.09 0.18 Net Debt/
Slide 8: Normalized Financial Key Ratios
NORMALIZED FINANCIAL KEY RATIOS Earnings per Share (Rs/Share) Cash Profit per Share (Rs/Share) 40 48.21 35 35.65 46 32.55 41 30 40.55 36 25 20 31 12.46 24.84 16.96 27.84 15 15.36 26 24.96 25.62 14.3 9.11 21 10 14.79 13.11 18.01 23.34 18.47 5.8 16 16.94 5 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q1FY22 Q2F
Slide 9: Creating Superior Shareholders' Value
CREATING SUPERIOR SHAREHOLDERS’ VALUE Dividend Per Share (Rs/Share) 16 15.0 14 13.5 11.5 12 11.0 10.0 10.1 9.9 10 9.0 9.0 9.0 8.0 8.0 8.0 8.1 7.5 7.2 8 6.5 6.5 6 4.0 4.0 4 5.4 2 0 9
Slide 10: Profit & Loss Statement Industry Format
PROFIT & LOSS STATEMENT INDUSTRY FORMAT Standalone INR Cr Consolidated Q1FY23 Q1FY22 FQ1Y23 Q1FY22 1,157 623 Operating Revenue 1,359 765 322 168 Less : Direct Operating Expenses/Voyage Expenses 328 186 835 455 Time Charter Equivalent (A) 1,031 579 0 12 Profit on sale of ships and other assets 0 12 8
Slide 11: Shareholding Pattern
FII/FPI 22% Promoters 30% SHAREHOLDING PATTERN Govt./FI/Corp 21% Public 27% Shareholding Pattern as on 30 June 2022 11
Slide 12: Management Commentary
MANAGEMENT COMMENTARY Mr. Bharat K Sheth Deputy Chairman & Managing Director “All four of our shipping sectors did well in Q1, some better than others. Having a large part of our fleet in the spot market helped us take advantage of the market strength. Strong cash flows from the business, coupled wi
Slide 13: Performance Review
PERFORMANCE REVIEW Break up of Revenue days (Shipping) Revenue Days Q1 FY23 Q1 FY22 Owned Tonnage 3,929 3,990 Inchartered Tonnage 215 16 Total Revenue Days 4,144 4,006 Total Owned Tonnage (mn.dwt) 3.57 3.68 Break up of Revenue days (Offshore) Revenue Days Q1 FY23 Q1 FY22 Offshore Logistics 1,555 1,5
Slide 14: Performance Review
PERFORMANCE REVIEW Average quarterly TCYs earned in various (Shipping) categories Average (TCY USD/day) Q1 FY23 Q4 FY22 Q-o-Q Change Q1 FY22 Y-o-Y Change Crude Carriers 28,852 15,051 92% 8,779 229% Product Carriers 25,745 10,251 151% 10,518 145% LPG Carriers 26,196 26,107 0% 26,514 -1% Dry Bulk 27,2
Slide 15: Changes in Standalone Net Asset Value (Y-O-Y)
CHANGES IN STANDALONE NET ASSET VALUE (Y-O-Y) INR/SHARE 15
Slide 16: Standalone Net Asset Value Movement – Last Years
STANDALONE NET ASSET VALUE MOVEMENT – LAST 5 YEARS Standalone NAV - Highest Since Inception 800 732 700 CAGR: 16% 600 INR/SHARE 500 337 400 300 200 100 0 FY17 FY18 FY19 FY20 FY21 FY22 Q1FY23 16
Slide 17: Completion of Buyback - Final Figures
COMPLETION OF BUYBACK - FINAL FIGURES Total Shares Bought Back 4,199,323 Amount Earmarked 225.00 (INR Cr) Average Price (INR/Share) 316.21* Taxation on Amount 52.42 (INR Cr) Amount Utilized (INR Cr) 132.77* Total Amount 277.42 % of Equity Reduced 2.86% Earmarked (INR Cr) Buyback tax on Utilized Maxi
Slide 18: Revenue Coverage
REVENUE COVERAGE Category-wise coverage of operating days (Shipping) --- FY23 Category Extent of coverage of fleet’s operating days Crude Carriers 15% Product Carriers 20% LPG Carriers 98% Dry Bulk 28% Category-wise coverage of operating days (Offshore) --- FY23 Category Extent of coverage of fleet’
Slide 19: GESCO Standalone Debt Repayment Schedule
GESCO STANDALONE DEBT REPAYMENT SCHEDULE (NEXT 5 YEARS) GESCO Standalone (USD mn) 100 500 80 81 80 470 74 400 66 60 60 300 USD mn USD mn 40 200 20 100 0 0 Jun-22 Mar-23 Mar-24 Mar-25 Mar-26 Mar-27 Loan Repayments Loan O/S (RHS) 1) Prepaid USD 31 Mn of ECB debt in Q1FY23. 2) Effective all-in USD cost
Slide 20: Fleet Profile
FLEET PROFILE SHIPPING Fleet (29-Jul-22) Committed Fleet DWT (FY23) No: Avg Age Capex/Sale Crude Carriers* 1,058,499 8 14.44 Sale*: 1 MGC committed to sell Product Carriers 1,092,465 18 14.38 by H1FY23 & Gas Carriers* 212,260 5 17.77 1 Aframax committed to sell Dry Bulk Carriers 1,210,805 14 9.30 by
Slide 21: Management Philosophy
MANAGEMENT PHILOSOPHY 7 DECADES OF UNPARALLELED EXPERIENCE Creating Superior Stakeholder Value Low balance sheet leverage; Sector Agnostic; High operating Value based approach leverage Maintain high cash not momentum balances; based Disciplined Use of Leverage Committed to health & Opportunistic min
Slide 22: Investment Thesis
INVESTMENT THESIS Fleet operated at global Offshore fleet – quality standards, with a large operations with low number of international balance sheet leverage customers Prudent Capital Allocation across a Strong cash flows diversified fleet High level of operating Strong balance sheet leverage in sh
Slide 23: Prudent Capital Allocation
105 35 45 55 65 75 85 95 Aug-05 Mar-06 Oct-06 May-07 Dec-07 Jul-08 Feb-09 Sep-09 Apr-10 Nov-10 Jun-11 Jan-12 Aug-12 Mar-13 Suezmax 5 year Oct-13 May-14 Momentum Buying Dec-14 Jul-15 Feb-16 Sep-16 Purchases Apr-17 Nov-17 Jun-18 Value Buying Jan-19 Aug-19 Sales & Purchase (Oil Tankers) vs Suezmax 5 ye
Slide 24: Shipping Market
> The Great Eastern Shipping Co. Ltd. SHIPPING MARKET
Slide 25: Tanker Market
TANKER MARKET
Slide 26: Crude and Product Tankers
Crude and Product Tankers Avg. Suezmax Earnings (USD/day) Avg. MR Earnings (USD/day) 90,000 45,000 80,000 40,000 70,000 35,000 60,000 30,000 50,000 25,000 40,000 20,000 30,000 15,000 20,000 10,000 10,000 5,000 0 0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ja
Slide 27: Crude and Product Tankers
Crude and Product Tankers • The Russia-Ukraine conflict provided a fillip to tanker markets as it led to significant altering of trade flows and increased fleet inefficiencies. Spot earnings rose 4-5X y-o-y after hovering around opex levels for around 2 years. • The recovery in spot earnings was led
Slide 28: Dry Bulk Market
DRY BULK MARKET
Slide 29: Dry Bulk
Dry Bulk DB Freight softened in Q1FY23 Y-O-Y, but Sub-Capes outperformed Capes Avg. Baltic Capesize 5T/C Earnings (USD/day) Avg. Baltic Supra BSI-58 10T/C Earnings 70,000 (USD/day) 40000 60,000 35000 50,000 30000 40,000 25000 30,000 20000 15000 20,000 10000 10,000 5000 0 0 Apr May Jun Jul Aug Sep Oc
Slide 30: Dry Bulk
Dry Bulk • During the quarter, spot earnings for Capes averaged significantly lower (down 32%), whereas those for sub capes rose 14% on a y-o-y basis respectively. This was the second straight quarter where sub capes continued to outperform the capesize spot earnings on an absolute basis. • Overall,
Slide 31: LPG (Gas) Market
LPG (GAS) MARKET
Slide 32: Gas
Gas Avg. VLGC Earnings (USD/day) 100,000 90,000 80,000 VLGC Spot earnings sustained healthy levels during 70,000 Q1 FY-23 and were higher YoY in comparison to Q1 60,000 FY-22. 50,000 40,000 30,000 20,000 10,000 April May June July Aug Sep Oct Nov Dec Jan Feb Mar USD/day YTDFY22 YTDFY23 % change FY 2
Slide 33: Gas
Gas • VLGC spot earnings averaged USD 46,000 / day during Q1 FY-23 up 29 % y-o-y basis. • Global VLGC trade grew 11 % y-o-y whereas fleet growth was 6.5 % y-o-y. • Effective VLGC fleet supply was higher y-o-y due to lower congestion at Panama Canal & drop in scheduled dry docking 33 Sources: Industr
Slide 34: Fleet Supply
Fleet Supply
Slide 35: One of the Lowest Order Book to Fleet Ratios
One of the Lowest Order Book to Fleet Ratios Historic Order Book as a % of fleet 90% 80% 70% 60% 50% 40% Current Orderbook 30% 5.06% 20% 5.08% 7.16% 10% 0% 2005 2007 2022 1999 2000 2001 2002 2003 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Crude Tankers Product Ta
Slide 36: Asset Price Movement
ASSET PRICE MOVEMENT 36
Slide 37: Asset Price Movement (Indexed)
115 135 100 110 120 130 75 95 90 Jul-17 Jul-17 Oct-17 Oct-17 Jan-18 Jan-18 Apr-18 Apr-18 Jul-18 Jul-18 Oct-18 Oct-18 Sources: Industry Reports Jan-19 Jan-19 Apr-19 Apr-19 Jul-19 Jul-19 Oct-19 Oct-19 Jan-20 Jan-20 Capesize Suezmax Apr-20 Apr-20 Jul-20 Jul-20 Over the Last 5 Years Oct-20 Oct-20 Jan-21
Slide 38: Scrapping
SCRAPPING Fleet Vessel (mn Dwt) Scrapping (% of beginning world fleet) Category Jul 22 H1CY2022 CY2021 CY2020 CY2019 CY2018 CY2017 CY2016 CY2015 CY2014 Crude 444 0.69% 2.47% 0.53% 0.55% 4.39% 2.43% 0.39% 0.38% 1.75% Product 174 0.69% 2.11% 0.57% 0.60% 1.72% 1.22% 0.54% 0.62% 1.10% Dry Bulk 958 0.20%
Slide 39: Greatship (India) Limited
Greatship (India) Limited (a 100% subsidiary)
Slide 40: Fleet Supply: Increasing number of Cold Stacked Rigs
Fleet Supply Increasing number of Cold Stacked Rigs Number Jackup Rigs PSVs + AHTSVs Current Fleet 488 3,484 Under Contract Fleet 340 2,155 Orderbook 27 117 O/B to current fleet 5.5% 3.4% Total Scrapping since January 2016 (nos.) 142 553 No. of Vessels/Rigs more than 20/30 years 33% 19% old (as %age
Slide 41: Market Trends: Utilisation
200 250 300 350 400 450 Jun 2010 Dec 2010 Jun 2011 Dec 2011 Jun 2012 Dec 2012 Jun 2013 Dec 2013 Jun 2014 Market Trends: Utilisation Dec 2014 Jun 2015 Dec 2015 Under Contract Jun 2016 Dec 2016 Jun 2017 Dec 2017 Jun 2018 Total Utilisation Dec 2018 Jack Up Utilisation : Gradual Improvement Jun 2019 Dec
Slide 42: Repricing
Repricing Vessels Rigs 6 4 3 3 1 1 1 1 1 0 0 0 H1 FY23 H2 FY23 H1 FY24 H2 FY24 H1 FY25 H2 FY25 We have entered into a new contract for one JU Rig which will start after completion of the existing contract. The rig comes for repricing only in H2FY26 42
Slide 43: Greatship Debt Repayment Schedule
GREATSHIP DEBT REPAYMENT SCHEDULE (NEXT 3 YEARS) GIL (USD Mn) 120 180 97 160 100 154 140 80 120 USD mn USD mn 100 60 80 40 36 60 20 40 20 20 0 0 Jun-22 Mar-23 Mar-24 Mar-25 Repayments Loan O/S (RHS) 43
Slide 44: Greatship Evolution: The Last 7 Years
GREATSHIP EVOLUTION: THE LAST 7 YEARS • Most challenging years for the offshore sector since the late 80s. • Utilization levels across asset classes dropped to historic lows, charter rates came down to levels that barely generated any +ve EBIDTA. • Large part of the industry went through financial r
Slide 45: Financials
A = ¥ The Great Eastern \ Shipping Co. Ltd. FINANCIALS
Slide 46: Counter Cyclical Investments have Generated Strong Cash Flows
Counter Cyclical Investments have Generated Strong Cash Flows 6 Year Cycle Net Debt Expansion Net Debt Reduction 400 0.60 Phase Phase 350 0.50 300 0.40 250 USD mn 200 0.30 150 0.20 100 0.10 50 - - FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 Q1FY2023 Net Debt Net Debt to Equity 46
Slide 47: Share Price to Consolidated NAV
Share Price to Consolidated NAV Share Price to Consolidated NAV 900 1 800 0.9 700 0.8 INR/Share 0.7 600 0.6 500 0.5 400 0.4 300 0.3 200 0.2 100 0.1 0 0 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Q1FY23 Consolidated NAV Standalone NAV Share Price/Consol. NAV (RHS) * For Q1FY23 we have taken share price as on
Slide 48: Great Eastern CSR Foundation (GECSRF)
GREAT EASTERN CSR FOUNDATION (GECSRF) GECSRF supports NGOs working under health, education and livelihoods CURRENT PARTNERS EDUCATION HEALTH LIVELIHOODS 48
Slide 49: Initiatives on Environment
INITIATIVES ON ENVIRONMENT • Reduced our annual CO2 emissions by about 40,000 tons between FY2019 and FY2022, by investing in various energy saving technologies. • After the Jan 2020 IMO mandate on switching from 3.50% Sulphur to 0.5%, there has been a drastic reduction of 83.65% of Sulphur Oxide (S
Slide 50: Thank You
THANK YOU Visit us at www.greatship.com From a modest beginning… ...to most admired globally 1948 2022 Read the Story of GE Shipping – Coffee Table Book 50
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