Pacific Basin Shipping Limited · HKEX:2343

Pacific Basin Shipping — Credit Suisse Asian Investment Conference 2013

32 slides from Pacific Basin Shipping's conference presentation, Mar 18, 2013

  1. Slide 1: 2012 Annual Results

    [Ss Credit Suisse 16" Asian Investment Conference — HK Pacific Basin March 2013 2012 Annual Results

  2. Slide 2: 2012 Annual Results – Group Highlights

    2012 Annual Results – Group Highlights 2012 2011 Operating Cash Flow Operating Cash Flow US$149m US$159m US$m 159 149 Underlying Profit US$48m US$58m Net (Loss) / Profit US$(158)m US$32m 2012 2011 Cash Position US$753m US$618m Underlying Profit Earnings per Share HK¢(64) HK¢13 US$m HK¢21 on continui

  3. Slide 3: Pacific Basin Dry Bulk – 2012 performance

    Pacific Basin Dry Bulk – 2012 performance Handysize 2012  Handysize daily rate: US$10,460 (-23% YOY)  PB outperformed spot market by 44% Dry Bulk net profit US$39.3m  Respectable performance reflects value of our industrial and  Handysize contribution US$62.0m customer-focused business model  H

  4. Slide 4: Pacific Basin Dry Bulk - Earnings Coverage

    Pacific Basin Dry Bulk - Earnings Coverage Handysize Handymax As at 25 February 2013 41,000 Fixed days 14,610  Our dry bulk business days Unfixed model facilitates a 29,760 valuable cargo book Days 1  Enables us to 8,740 outperform the market Days 1 (by 44% in 2012) 100% 55% 100% 80% US$10,460 US$

  5. Slide 5: Dry Bulk Market Information

    Dry Bulk Market Information  Excessive newbuilding deliveries in 2012 impacted freight rates across all dry bulk segments  Lowest annual average BDI since 1987  Average Handysize and Handymax daily market spot rates fell 28% YOY - still equalled or exceeded average rates for larger vessels  Prot

  6. Slide 6: Dry Bulk Demand

    Dry Bulk Demand Dry Bulk Effective Demand 2012 Chinese Minor Bulk Imports % change YOY m tonnes 25 Chinese Imports increased 7% in 2012 14 12 20 10.0 10 9.0 8 7.2 15 6 4.1 3.1 4 10 2012 2011 2 2010 0 5 -2 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2008 2009 2010 2011 2012E 1QE 2QE 3QE 4QE China

  7. Slide 7: Global Dry Bulk Fleet Development

    Global Dry Bulk Fleet Development  2012 net fleet growth: Handysize Age Profile (25,000-39,999 dwt) Handysize Dry Bulk overall 2,115 vessels (68.1m dwt) YOY 3% 10% 30+ years  Driven by 98m tonnes of new capacity (deliveries 7% slowed in 4Q) 25 - 29 years 15%  Heavy influx of newbuildings was only

  8. Slide 8: Dry Bulk Orderbook

    Dry Bulk Orderbook Handysize Orderbook 341 vessels (12m dwt) Jan13 Orderbook m Dwt 14  Ship owners ordered 55% less new capacity YOY due to 28% 12 weak market conditions Shortfall 10 1.1%  101m dwt of new capacity scheduled to deliver in 2013 8 11.5%  2012 Newbuilding deliveries of 98m dwt were 3

  9. Slide 9: Pacific Basin Dry Bulk - Outlook

    Pacific Basin Dry Bulk - Outlook  Strong Chinese demand for minor bulk  Still excessive, but reduced, overhang of supply commodities + shipbuilding capacity  Global trade imbalances and fleet utilisation  Global economic recovery negatively impacted inefficiencies by further shocks relating to E

  10. Slide 10: PB Towage

    PB Towage 2012 Performance 2012  Continued strong demand for marine logistics from oil & gas projects Towage net profit US$37.7m  Good growth in harbour towage sector Operating cash flow US$52.1m  PB Towage results have continued to strengthen due to: Return on net assets 17%  Improved market co

  11. Slide 11: PB Towage - Outlook

    PB Towage - Outlook  Growing project activity in Australasia and  Hesitation in global economy recovery and construction support both domestically in Chinese slowdown – impacting Australian Australia and internationally port activity  Increased exploration and production leading  Labour market s

  12. Slide 12: PB RoRo

    PB RoRo 2012 PB RoRo net loss US$(12.1)m (Excluding US$199m impairment and exchange loss) Operating cash flow US$3.1m  Considered a discontinued operation  Continued severe weakness in the RoRo sector impacted results and prospects for our RoRo business  Mid-year impairment and decision to exit R

  13. Slide 13: 2012 Annual Financial Highlights

    2012 Annual Financial Highlights US$ m 2012 2011 Segment net profit 74.5 89.5  Treasury (6.1) (12.8)  Discontinued Operations - RoRo (12.1) (10.6)  Non direct G&A (8.5) (8.3) Underlying profit 47.8 57.8  Unrealised derivative expenses (3.3) (1.6)  RoRo vessel impairment charge & exchange loss (

  14. Slide 14: Pacific Basin Dry Bulk

    Pacific Basin Dry Bulk Handysize 2012 2011 Change Revenue days (days) 41,000 32,710 +25% TCE earnings (US$/day) 10,460 13,530 -23% Owned + chartered costs (US$/day) 8,910 9,930 +10% Handysize contribution (US$m) 62.0 115.2 -46% Handymax & Post Panamax (US$m) 12.6 (1.7) +841% Direct overhead (US$m) (

  15. Slide 15: Daily Vessel Costs - Handysize

    Daily Vessel Costs - Handysize As at 31 Dec 2012 Charter-hire Finance cost Depreciation Opex Owned* Chartered US$/day Daily charter hire rates & days 14,000 Blended US$8,910 (2011: US$9,930) 2013-2015 12,000 11,810 $10,800 $10,710 $9,460 10,000 9,340 8,200 8,000 7,710 960 1,000 6,270 9,380 5,700 6,0

  16. Slide 16: Balance Sheet

    Balance Sheet PB PB Discontinued US$m Dry Bulk Towage RoRo Treasury 31 Dec 12 31 Dec 11 Vessels & other fixed assets 1,057 208 - - 1,270 1,525 Total assets 1,292 273 131 745 2,470 2,432 Long term borrowings 301 31 - 599 931 779 Total liabilities 437 55 4 618 1,138 947 Net assets 855 218 127 127 1,33

  17. Slide 17: Borrowings and Capex

    Borrowings and Capex The Group had cash balances of US$753m, borrowings of US$931m and a net borrowings ratio of 14% against the Net Book Value of property, plant and equipment 250 230 As at 31 Dec 2012 215 Redeemable in Apr 2014 200 141 150 124 100 82 Redeemable in Apr 2016 69 60 69 50 34 35 37 27

  18. Slide 18: Cash Flow

    Cash Flow 2012 Sources and Uses of Group Cash Flow US$ m Operating cash flow US$148.7m 1,000 EBITDA US$145.1m +163.1 (excluding impairment) 900 800 +148.7 +47.8 +753.5 700 -195.4 -12.5 -16.4 +618.2 600 500 Opening Operating Increase in Capex Dividend Net Others Closing Cash cash borrowings paid Inte

  19. Slide 19: Our Position, Outlook and Strategy

    Our Position, Outlook and Strategy  Focus on our two core businesses – we are now out of most non core activities Dry Bulk  Strong cargo and customer focused business model: outperforming market, outperforming larger ships  Expect the dry bulk market weakness of 2012 to continue through 2013  Ma

  20. Slide 20: 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,

  21. Slide 21: Appendix: Pacific Basin Overview

    Appendix: Pacific Basin Overview  A leading dry bulk owner/operator of Handysize & Handymax dry bulk ships  Flexible Pacific Basin Dry Bulk business model  Large fleet of uniform, interchangeable, modern ships  Mix of owned and long-term, short-term chartered ships  Operating mainly on long ter

  22. Slide 22: How we create value

    Appendix: How we create value Our large, flexible Fleet Our strong corporate profile  Large scale, high-quality dry bulk fleet  Founded in 1987  Interchangeable nature provides flexibility  Strong balance sheet enhancing our to customers and ability to optimise profile as a preferred counterpart

  23. Slide 23: Pacific Basin Dry Bulk – Diversified Cargo

    Appendix: Pacific Basin Dry Bulk – Diversified Cargo Pacific Basin Handysize and Handymax Cargo Volume 2012  Diverse range of commodities reduces product risk  Australia and China were our largest loading and discharging zones respectively  Increasing proportion of our business in the Atlantic 20

  24. Slide 24: China at late-Industrialisation Stage

    Appendix: China at late-Industrialisation Stage Steel Consumption Per Capita Tons per Capita 1.0  China growth matches historical trend in Japan and Korea 0.9  Suggests strong growth in dry bulk 0.8 segment to remain for medium term 0.7  Similar trend for electricity and cement 0.6 0.5 0.4 0.3 0.

  25. Slide 25: China Dry Bulk Trade, Iron Ore & Coal Demand

    Appendix: China Dry Bulk Trade, Iron Ore & Coal Demand Chinese Dry Bulk Trade Volume China is a significant net importer China Iron Ore Sourcing of coal in 2012 for Steel Production % of total dry m tonnes bulk trade m tonnes m tonnes 1,134 350 1,200 1,095 1,200 32% 29% 28% 300 289 1,000 +4% 27% 26%

  26. Slide 26: Pacific Basin Dry Bulk - Handymax

    Appendix: Pacific Basin Dry Bulk - Handymax 2012 2011 Change Revenue days (days) 14,610 13,310 +10% TCE earnings (US$/day) 11,720 15,090 -22% Owned + chartered costs (US$/day) 11,240 15,390 +27% Handymax contribution (US$m) 6.7 (4.7) +243% Post Panamax contribution (US$m) 5.9 3.0 +97% Total contribu

  27. Slide 27: Daily Vessel Costs – Handymax

    Appendix: Daily Vessel Costs – Handymax Charter-hire As at 31 Dec 2012 Finance cost Depreciation Opex Owned Chartered US$/Day Blended US$11,240 (2011: US$15,390) Daily charter hire rates & days 20,000 2013-2015 15,590 3,500 $14,500 15,000 days $13,720 11,430 $11,510 10,000 8,560 8,550 3,750 1,360 3,

  28. Slide 28: Towage Segment Operating Performance Before Overheads

    Appendix: Towage Segment Operating Performance Before Overheads As at 31 Dec 2012 17.0% US$m 70 7.0% Operating performance US$55.3m 60 55.3 Direct overheads US$(17.6)m 50 40 32.3 Segment net profit US$37.7m 39.4 30 Operating cash flow US$52.1m 20 25.6 10 14.6 8.2 1.3 0 -10 -1.5 2011 2012 Offshore &

  29. Slide 29: PB RoRo Impairment & exchange loss in 2012

    Appendix: PB RoRo Impairment & exchange loss in 2012  Euro-centric RoRo market severely impacted by protracted European debt crisis and macro-economic and political uncertainty significantly reduced demand for chartered RoRos  18 June, announced US$190m non-cash impairment and intention to exit Ro

  30. Slide 30: Capex and Combined Vessel Value

    Appendix: Capex and Combined Vessel Value As at 31 Dec 2012 A Combined View of Vessels Commitments Vessel Carrying Values and Commitments US$ m Total US$236m Total US$1,506m US$ m 240 215 1,600 200 1,400 1,298 1,200 236 160 102 1,000 189 120 800 80 600 113 400 873 21 208 40 200 21 208 0 0 2013 2014

  31. Slide 31: Convertible Bonds Due 2018

    Appendix: Convertible Bonds Due 2018 Issue size US$123.8 million Maturity Date 22 October 2018 (6 years) Investor Put Date and Price 22 October 2016 (4 years) at par PB’s Call Option 1) Trading price for 30 consecutive days > 130% conversion price in effect 2) >90% of Bond converted / redeemed / pur

  32. Slide 32: Convertible Bonds Due 2016

    Appendix: Convertible Bonds Due 2016 Issue size US$230 million Maturity Date 12 April 2016 (6 years) Investor Put Date and Price 12 April 2014 (4 years) at par Coupon 1.75% p.a. payable semi-annually in arrears on 12 April and 12 October Redemption Price 100% Initial Conversion Price HK$7.98 (Curren

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