Pacific Basin Shipping Limited · HKEX:2343
Pacific Basin Shipping — FY2013 Earnings Presentation
30 slides from Pacific Basin Shipping's earnings presentation, Feb 27, 2014
Slide 1: Pacific Basin Annual Results 2013
2 Pacific Basin Annual Results 2013 27 Feb 2014
Slide 2: 2013 Annual Results – Group Highlights
2013 Annual Results – Group Highlights Underlying Profit EBITDA US$ Million 2013 2012 145.1 47.8 130.4 Net Profit / (Loss) US$1.5m US$(159)m Earnings per Share HK¢0.6 HK¢(64) 15.6 Cash Position US$486m US$754m Dividend per Share HK¢5 (proposed) HK¢5 2012 2013 2012 2013 Group results were affected
Slide 3: Pacific Basin Dry Bulk – 2013 Performance
Pacific Basin Dry Bulk – 2013 Performance Handysize Outperformed Market by: 22% US$ million 2013 Daily Earnings US$9,520 -9% YOY Dry Bulk net profit 26.1 Handysize contribution 51.9 Daily Costs US$8,480 -5% YOY Handymax contribution 8.5 Direct overheads (40.0) Handymax Outperformed Market by:
Slide 4: Pacific Basin Dry Bulk – Earnings Coverage
Pacific Basin Dry Bulk – Earnings Coverage As at 21 Feb 2014 Covered Uncovered PB Dry Bulk Fleet Development No. of vessels at year end Handysize Handymax (including Newbuildings) 52,550 days 20,660 days 278 2 251 36,750 days 12,520 days 89 184 100% 100% US$9,520 US$10,880 187 53% 68% US$10,090 US$1
Slide 5: Dry Bulk Market Information
Dry Bulk Market Information 2013 started with weakest half-year market since 1986 2H freight rates improved significantly albeit regionally - 4Q Handysize rates reaching 2011 levels Weak first 2 months of 2014 – Indonesia minerals export ban + usual seasonal fluctuations Ship values improved
Slide 6: Dry Bulk Demand
Dry Bulk Demand Dry Bulk Effective Demand Chinese Minor Bulk Imports % change YOY Million tonnes Chinese imports 16 30 increased 24% in 2013 1Q-4Q 2013 Slow 1H Strong 2H 25 12 9.1 20 7.3 8 15 4 10 5 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2013 2012 2011 2010 -4 These 7 commodities make up
Slide 7: Global Dry Bulk Fleet Development
Global Dry Bulk Fleet Development net fleet growth Handysize Dry Bulk overall Handysize Age Profile (25,000-39,999 dwt) 2,206 vessels (70.9m dwt) 1H13 +0.8% +3.4% 2H13 +0.3% +2.4% 30+ years 2013 +1% +6% 8% 25-29 years 8% 0- 15 years Dry bulk net fleet growth: 11% 73% Driven by 62m tonnes of new ca
Slide 8: Dry Bulk Orderbook
Dry Bulk Orderbook Handysize Orderbook 397 vessels (14.6m dwt) m Dwt 12.8% Dry bulk orderbook bottomed out Aug 2013 at 18% 9 35% 8 Shortfall Current orderbook: 21% 7 8.7% 6 8.3% 7.8% New orders generally not possible for deliveries before: 5 2017 in Japan 4 4.1% 2016 in China 3 2 1 0 Order
Slide 9: Pacific Basin Dry Bulk – Outlook
Pacific Basin Dry Bulk – Outlook China’s continued strong demand for minor Shipowner optimism resulting in less scrapping bulks despite slower economic growth and increased vessel ordering Increased overseas mining output and lower Credit squeeze in China leading to slower commodity prices e
Slide 10: PB Towage – 2013 Performance
PB Towage – 2013 Performance 2013 Performance 2013 US$ million Solid 1H contribution followed by a significantly weaker 2H: Towage net profit 10.5 Wind-down of existing projects + start-up of new operations EBITDA 24.2 reduced revenue and increased costs Return on net assets 5% Harbour Towage
Slide 11: Towage Segment Operating Performance Before Overheads
Towage Segment Operating Performance Before Overheads As at 31 December 2013 Towage Operating Performance US$m % 60 20 US$ million 2013 55.1 18 50 17.3% Operating performance 29.5 16 14 Direct overheads (19.0) 40 12 29.5 Segment net profit 10.5 30 39.4 39.4 10 8 EBITDA 24.2 20 20.0 6 5.1% 4 10 14.6
Slide 12: PB Towage – Outlook
PB Towage – Outlook Continued project activity in Australasia Labour market shortages and cost pressures providing further demand for project and in Australia impacting project economics and construction cargo logistics timelines Growth in Australian bulk exports, Increased competition from
Slide 13: 2013 Financial Highlights
2013 Financial Highlights US$m 2013 2012 Segment net profit 36.0 78.0 Treasury (4.4) (6.1) Discontinued Operations - RoRo (0.5) (12.1) Non direct G&A (15.5) (12.0) Underlying profit 15.6 47.8 Unrealised derivative income/(expenses) 1.8 (3.3) RoRo exchange loss & vessel impairment (7.8) (19
Slide 14: Pacific Basin Dry Bulk
Pacific Basin Dry Bulk Handysize 2013 2012 Change Revenue days (days) 52,550 41,000 +28% TCE earnings (US$/day) 9,520 10,460 -9% Owned + chartered costs (US$/day) 8,480 8,910 -5% Handysize contribution (US$m) 51.8 62.0 -16% Handymax contribution (US$m) 8.5 6.7 +27% Post Panamax contribution (US$m) 5
Slide 15: Daily Vessel Costs – Handysize
Daily Vessel Costs – Handysize Finance cost Charter-hire : Short-term (ST) / Long-term (LT) As at 31 December 2013 Depreciation Charter-hire : Index-linked Opex Chartered Inward Charter Commitments Owned Including finance lease vessels Days & rates Blended US$8,480 (2012: US$8,910) 2013-2015 US$/day
Slide 16: Daily Vessel Costs – Handymax
Daily Vessel Costs – Handymax Finance cost Charter-hire : Short-term (ST) / Long-term (LT) As at 31 December 2013 Depreciation Charter-hire : Index-linked Opex Owned Chartered Inward Charter Commitments US$/Day Days & Rates 14,000 Blended US$10,440 (2012: US$11,240) 2013-2015 Vessel Days 11,430 12,0
Slide 17: Balance Sheet
Balance Sheet PB PB Discontinued US$m Dry Bulk Towage Treasury RoRo 31 Dec 13 31 Dec 12 Vessels & other fixed assets 1,436 183 - - 1,622 1,270 Total assets 1,655 244 579 32 2,537 2,470 Long term borrowings 1,015 22 - - 1,037 931 Total liabilities 1,160 40 12 4 1,233 1,138 Net assets 495 204 567 28 1
Slide 18: Borrowings and Capex
Borrowings and Capex The Group had cash balances of US$486m, borrowings of US$1,037m and a net borrowings ratio of 34% against the Net Book Value of property, plant and equipment US$ million Investors’ Maturity 300 Put Date Date 250 230 236 234 Investors’ Maturity 200 Put Date Date 165 150 138 132 1
Slide 19: Cash Flow
Cash Flow – 2013 Sources and Uses of Group Cash Flow Cash inflow Cash outflow Operating cash flow US$98m US$ Milion EBITDA US$130m 1,100 +55 +100 2014 cash levels expected to be affected by: 1,000 +98 Pace of capital expansion 900 New loan facilities to be secured using our 800 +753 existing unm
Slide 20: Our Outlook and Strategy
Our Outlook and Strategy Dry Bulk Cyclical upturn has started – supply and demand balance continues to improve… expect a stronger, volatile dry bulk market in 2014 We remain selectively open to appropriately priced ship acquisitions to further position ourselves for a stronger market Strategy:
Slide 21: 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,
Slide 22: 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
Slide 23: Appendix: Strategic Model
Appendix: Strategic Model OUR STRONG CORPORATE & OUR LARGE VERSITILE FLEET FINANCIAL PROFILE Striving for best-in-class internal and external Fleet scale and interchangeable high-quality dry reporting, transparency and corporate stewardship bulk ships facilitate service flexibility to Robust balance
Slide 24: Pacific Basin Dry Bulk – Diversified Cargo
Appendix: Pacific Basin Dry Bulk – Diversified Cargo Pacific Basin Handysize and Handymax Cargo Volume 2013 Energy Agricultural Products Coal 5% Petcoke 12% Grains & Agriculture Products 17% 7% Fertiliser 9% 30% Sugar 4% Metals Alumina 5% 17% Ores 7% 50.3 Concentrates & Other Metals 5% Millio n Tonn
Slide 25: Appendix: Fleet List – As at 24 Feb 2014
Appendix: Fleet List – As at 24 Feb 2014* Pacific Basin Dry Bulk Fleet: 278 (currently operating: 241) average age of core fleet: 6.6 years old Owned Chartered Total Delivered Newbuilding Delivered Newbuilding Fleet Details www.pacificbasin.com Handysize 62 13 98 14 187 1 Handymax 15 6 64 4 89 1 Pos
Slide 26: Appendix: Vessels Commitments
Appendix: Vessels Commitments Total US$525m US$m 250 236 200 93 138 150 132 23 100 61 109 143 50 77 19 19 0 2014 2015 2016 2017 Handysize x 16, US$329m Handymax x 8, US$196m Further commitments expected in Dry Bulk 2013 Annual Results 26
Slide 27: Appendix: 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
Slide 28: Appendix: 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
Slide 29: Appendix: 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.
Slide 30: Appendix: 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 China Iron Ore Sourcing net importer of coal for Steel Production % of total dry Mil tonnes bulk trade 31% Mil Tonnes Mil Tonnes 1800 29% 400 1,400 1500 350 1,239 319 1,200 1,134 300 289 1200
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