Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping — Investor Presentation (July 2009)
33 slides from Great Eastern Shipping's investor presentation, July 2009
Slide 1: Business & Financial Review July 2009
The Great Eastern Shipping Co. Ltd. Business & Financial Review July 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 $ Diverse asset base with global operations $ Completed 61 years of operations $ More than 26 years of uninterrupted dividend track record Shareholding Pattern as on Mar 31st, 2009 FIIs Public 19% 28% Govt/FI 15% Bodies Promoters
Slide 5: Shipping business-owned fleet
Shipping business-owned fleet 37 ships aggregating 2.84 Mn dwt, avg.age 10.0 years 31 Tankers avg.age 9.5 years (85% in tonnage terms) 12 Crude carriers (6 Suezmax, 6 Aframax) avg.age 9.5 years (2 single hull – both double sided) 18 Product tankers (4 LR1, 9 MR, 5 GP) avg.age 9.4 years (5 si
Slide 6: Shipping business – Inchartered fleet
Shipping business – Inchartered fleet Total Inchartered Fleet : 4 ships (including in subsidiaries) Tankers : 2 9 2 Suezmax Crude Carriers Dry Bulk : 2 9 2 Supramax Bulk Carriers 6
Slide 7: Committed CAPEX – Shipping Business
Committed CAPEX – Shipping Business Committed Capex of around USD 492 Mn - 8 new building contracts aggregating 0.76 mn. dwt 9FY 2011 - 1 NB, Kamsarmax Dry Bulk Carrier (STX Shipbuilding Co. Ltd) - 2 NB, Supramax Dry Bulk Carriers(Cosco (Zhoushan) Shipyard Co. Ltd) 9FY 2012 - 3 NB, Kamsarmax Dry Bul
Slide 8: Offshore business - Fleet Profile
Offshore business- Fleet Profile ¾ Current Owned Fleet 9 5 Platform Supply Vessels (PSV) 9 7 Anchor Handling Tug cum Supply Vessel (AHTSV) ¾ Current Inchartered Fleet 9 1 Platform Supply Vessels (PSV) 9 1 350ft Jack Up Rig JV between Greatship (I) Ltd & DOF Subsea, Norway - focus on subsea projects
Slide 9: Committed CAPEX – Offshore Business
Committed CAPEX – Offshore Business ¾ Committed Capex of around USD 686 Mn 9 FY 2010 - 1 NB 80T AHTSV (Labroy) - 4 NB MPSVs (Keppel Singmarine) - A New Building 350 ft Jack Up Rig (Keppel) - 1 NB Construction Support Vessel (CDL) 9 FY 2011 - 3 NB Construction Support Vessel (CDL) - 2 NB MSVs (Mazago
Slide 10: Committed Capex for the Group
Committed Capex for the Group Total Investment Rs.1,116 crs Equity (Rs852 crs) + Pref (Rs.264 crs) G E Shipping Greatship (India) Ltd (Committed CAPEX (Committed CAPEX USD 492 mn) USD 686 mn) Total committed CAPEX of USD 1. 17 bn Spread over next two & half years To be financed with a mix of debt &
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 FY09 Performance
Financial Highlights of FY09 Performance Standalone Consolidated (Rs.crs) Q4FY09 Q4FY08 % chg FY09 FY08 % chg FY09 FY08 % chg Freight & Charter hire 561 738 (23)% 2,829 2,581 10% 3,792 3,108 22% Gain on sale of ships (27) 46 (159)% 254 289 (12)% 254 289 (12)% Total Income 534 784 (32)% 3,083 2,870 7
Slide 14: Q4 FY09 Performance Highlights
Q4 FY09 Performance Highlights Lower revenue days Q-on-Q due to smaller fleet Substantially lower TCY rates on dry bulk Operating Profit (PBDIT) down 32% Breakup of revenue days Q4 FY09 Q4 FY08 % chg Revenue Days FY09 FY08 % chg 3,401 4,052 (16)% Owned Tonnage 14,014 16,034 (13)% 64 171 (63)%
Slide 15: Earnings Mix
Earnings Mix GE Shipping Average TCY Details Q4FY09 Q4FY08 % change Average TCY ($ per day) FY09 FY08 % change 34,450 35,139 (2)% Crude Carriers 41,231 30,021 37% 21,495 19,800 9% Product Carriers 23,729 19,921 19% 23,264 49,152 (53)% Dry Bulk Carriers 39,798 38,418 4% Mix of Spot & Time Q4 FY09 Q4
Slide 16: Industry Scenario
0D eee 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 June 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
World Fleet Supply 2006 2007 2008 Forecast Forecast Forecast 2009 2010 2011+ VLCC 3.4% 4.0% 3.8% 7.7 % 12.9% 17.3% Suezmax 7.0% 4.6% 0.9% 14.3% 10.9% 13.4% Aframax 5.5% 7.3% 6.1% 8.0% 11.0% 6.6% Panamax 13.8% 12.4% 8.8% 9.6% 6.6% 9.8% Handymax 7.9% 8.4% 10.6% 12.6% 11.8% 6.3% Capesize 9.1% 8.5% 9.0%
Slide 19: Gross World fleet addition-Shipping
Gross World fleet addition-Shipping World Fleet addition* 2009 2010 2011 15% of world tanker fleet Crude tankers 8.8% 11.7% 11.4% single hull Product tankers 11.4% 10.3% 5.8% Dry bulk carriers 13.4% 23.1% 13.5% *includes only new building from yards Fleet as on Scrapping 1st Jun’09 (in mn dwt) CY200
Slide 20: Tanker Market
Tanker Market Crude: Demand for oil to be weaker in 2009 as compared to 2008 Contraction in world output likely to depress energy consumption High fleet growth to put excessive pressure Product: Low refining margins & depressed demand keeping product tanker rates down Fleet supply overhand still
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 Excessive fleet addition to be highest in this segment … but a ray of hope… Increase in level of scrapping activity Construction on more than one third of the existing orderbook not yet begun. First trigger for a market upt
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* 2,226 1,843 1,657 Orderbook 540 245 208 Aging Fleet % of O/B to current fleet 24% 13% 12% 9 55% of the total fleet * Data as on Jun’09, 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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