Pacific Basin Shipping Limited · HKEX:2343

Pacific Basin Shipping — H1 2015 Earnings Presentation

36 slides from Pacific Basin Shipping's earnings presentation, Jul 30, 2015

  1. Slide 1: 2015 Interim Results: Navigating with resilience

    2 Pacific Basin 2015 Interim Results Navigating with resilience Experienced team Fr Exceptional fleet N Customers first © y ail - 30 July 2015

  2. Slide 2: 2015 Interim Results – Group Highlights

    2015 Interim Results – Group Highlights 1H15 1H14 Net Profit / (Loss) US$5.8m US$(90.7)m EBITDA US$41.5m US$46.9m Cash Position US$392m US$320m Net Gearing 34% 39%  Our results were influenced by:  Robust balance sheet :  One of the weakest ever half-year periods  New US$125m convertible bond fo

  3. Slide 3: Our Increased Focus on Dry Bulk

    Our Increased Focus on Dry Bulk Early 2012 2015 Four business units Fully dry bulk focused US$m ME Towage 17 Newbuildings Terminals, etc Towage Minor player with no competitive RoRo 81 World’s largest advantage Dry Bulk Handysize Ships owner & operator Dry Bulk in operation Ships Strong platform but

  4. Slide 4: Pacific Basin Dry Bulk – 1H15 Performance

    Pacific Basin Dry Bulk – 1H15 Performance US$ million 1H15 1H14 Dry Bulk net loss (15.4) (11.4)  Handysize contribution (0.6) 26.2  Handymax contribution 10.4 (10.7)  Post-Panamax contribution 2.7 2.7  Direct overheads (24.6) (24.7)  Indirect overheads (3.3) (4.9) EBITDA 39.3 49.5 Vessel net bo

  5. Slide 5: Cargo System Business Model – Outperforming Market Rates

    Cargo System Business Model – Outperforming Market Rates Cargo Contract Business Model – Outperforming Market Indices US$/day 15,000  Experienced staff & global office network – Direct end-user interaction 12,500  Large fleet of high-quality substitutable ships 10,000 $9,340  Large portfolio of c

  6. Slide 6: Pacific Basin Dry Bulk – Earnings Cover

    Pacific Basin Dry Bulk – Earnings Cover Handysize Handymax 48,670 46,600 Revenue Days 18,680 Revenue Days 17,300 Revenue Days Revenue Days 2H 33,970 59% 2H Revenue Days 2H 58% 59% 2H $9,400 $8,740 $9,925 62% 9,420 $9,420 Revenue Days 27,200 26,620 11,640 10,280 days days days days 100% 100% 100% 100

  7. Slide 7: Dry Bulk Market

    Dry Bulk Market The Market is Weak Total Dry Bulk Supply & Demand Handysize vessel values Baltic Handysize Index (BHSI) & Baltic Supramax Index (BSI) Quarterly YOY % change US$/day net* US$ Million 25% 55 $16,000 20% 50 $14,000 Supply 45 27 Jul 15: 15% $12,000 BSI: $8,980 40 $10,000 10% 24 July 2015

  8. Slide 8: Dry Bulk Supply

    Dry Bulk Supply Fleet Growth is Reducing Total dry bulk YOY Net Fleet Growth (%) What is going to happen to fleet growth in 2015? 18% 16% Mil Dwt 14% 35 12% Minimal global fleet growth 10% 30 since end Jan15 due to 8% 1 Jul 15: increased scrapping of 6% 2.6% 25 oldest vessels (lowest Lowest fleet gr

  9. Slide 9: Dry Bulk Self-Correcting Factors

    Dry Bulk Self-Correcting Factors Supply Demand Chinese Minor Bulk Imports Number of Delivery Million Tonnes 30 -7% YOY Chinese yards Slippage but growing since March delivering 25 Handy bulk 20 vessels decreased Orderbook from 54 in 2012 Cancellations & 15 to 21 in 2015 Conversions 10 Increased Scra

  10. Slide 10: 2015 Interim Financial Highlights

    2015 Interim Financial Highlights 1H15 1H14 US$m Pacific Basin Dry Bulk (15.4) (11.4) PB Towage 1.4 (9.2) Others (0.6) (0.9) Underlying loss (14.6) (21.5)  Unrealised derivative income/(expense) 16.7 (0.3)  Sale of interests in bunker tanker joint venture 3.7 -  Towage impairments and provisions

  11. Slide 11: 1H15 Pacific Basin Dry Bulk

    1H15 Pacific Basin Dry Bulk Handysize 1H15 1H14 Change Revenue days (days) 26,620 27,200 -2% TCE earnings (US$/day) 7,940 10,210 -22% Owned + chartered costs (US$/day) 7,870 9,120 +14% Handysize contribution (US$m) (0.6) 26.2 -102% Handymax Revenue days (days) 10,280 11,640 -12% TCE earnings (US$/da

  12. Slide 12: 1H15 Daily Vessel Costs – Handysize

    1H15 Daily Vessel Costs – Handysize Finance cost Charter-hire : Short-term (ST) / Long-term (LT) Depreciation Charter-hire : Index-linked As at 30 June 2015 Opex Inward Charter Commitments Owned Chartered Days & rates Including finance lease vessels 2015-2016 US$/day Blended US$7,870 (2014: US$8,750

  13. Slide 13: 1H15 Daily Vessel Costs – Handymax

    1H15 Daily Vessel Costs – Handymax Finance cost Charter-hire : Short-term (ST) / Long-term (LT) Depreciation Charter-hire : Index-linked As at 30 June 2015 Opex Owned Chartered Inward Charter Commitments US$/Day Days & Rates 14,000 Blended US$8,330 (2014: US$11,050) 2015-2016 Vessel Days 11,810 8,00

  14. Slide 14: 1H15 Balance Sheet

    1H15 Balance Sheet PB PB US$m Dry Bulk Towage 30 Jun 15 31 Dec 14 Vessels & other fixed assets 1,535 39 1,578 1,585 Total assets 1,703 46 2,194 2,308 Total borrowings 930 - 930 1,000 Total liabilities 1,144 9 1,199 1,306 Net assets 559 37 995 1,002 Net borrowings (total cash US$392m) 538 636 Net bor

  15. Slide 15: Borrowings and Capex

    Borrowings and Capex As at 30 June 2015 Bank borrowings (US$513 million) & finance lease liabilities (US$16 million due 2H 2015) – undrawn committed bank facilities US$498m Convertible bonds, face value US$431 million, book value US$401million Vessel capital commitments (US$353 million) 2015 Interim

  16. Slide 16: Cash Flow

    Cash Flow As at 30 June 2015 Operating cash flow US$58.8m EBITDA US$41.5m (Net of US$124m CB proceeds) 2015 Interim Results 16

  17. Slide 17: Our Outlook and Strategy

    Our Outlook and Strategy Dry Bulk Outlook Pacific Basin Benefits:  We anticipate weak market rates in medium term and we continue to manage our business accordingly Now fully Handy focused  Supply: Scrapping, NB cancellations & postponements and very little new ordering are helping  Demand: tradi

  18. Slide 18: 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,

  19. Slide 19: 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

  20. Slide 20: 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

  21. Slide 21: Pacific Basin Dry Bulk – Diversified Cargo

    Appendix: Pacific Basin Dry Bulk – Diversified Cargo   Diverse range of commodities reduces product risk China and North America were our largest market More than  60% of business in Pacific and 40% in Atlantic 400 customers! 2015 Interim Results 21

  22. Slide 22: Fleet List – 1 July 2015

    Appendix: Fleet List – 1 July 2015* Pacific Basin Dry Bulk Fleet: 243 average age of core fleet: 7.0 years old Owned Chartered Total Delivered Newbuilding Delivered¹ Newbuilding www.pacificbasin.com Fleet Details Handysize 64 12 78 7 161 Handymax 16 5 37 1 59 Post-Panamax 1 0 1 0 2 Total 81 17 116 8

  23. Slide 23: Appendix: Experienced Management - Team

    Appendix: Experienced Management - Team Chairman & BOD Numbers Indicate Years in Company / Years in Shipping CEO Mats Berglund Asset Management 3/29 Morten Ingebrigtsen Finance & Accounting, CFO 26/29 Andrew Broomhead 12/12 HR P.B. Subbiah Company Secretary & Risk 12/21 Kitty Mok 19/19 Chartering Ch

  24. Slide 24: Appendix: Sustainability

    Appendix: Sustainability  Applying sustainable thinking in our decisions and the way we run our business  Creating long-term value through good corporate governance and CSR Corporate Social Responsibility (CSR)  Guided by strategic objectives on (i) workplace practices (primarily safety), (ii) th

  25. Slide 25: Appendix: PB Towage

    Appendix: PB Towage  Towage activities significantly reduced after sale of harbour towage business 1H15 and our shareholding in OMSA US$ million  About US$3.7m gain on disposal of our share in a bunker tanker Towage net profit 1.4 Middle East: EBITDA 2.2  Remaining towage assets are operating in

  26. Slide 26: Appendix: Vessel Operating Lease Commitments

    Appendix: Vessel Operating Lease Commitments As at 30 June 2015 77 2015 Interim Results 26

  27. Slide 27: Appendix: Vessels Commitments

    Appendix: Vessels Commitments Total US$353m US$ mil 183 200 To be largely funded by US$350m committed 150 60 Japanese export credit facility 100 84 86 3 123 51 50 81 35 0 2H15 2016 2017 Handysize x 12, US$239m Handymax x 5, US$114m 2015 Interim Results 27

  28. Slide 28: Appendix: Historical earnings

    Appendix: Historical earnings www.pacificbasin.com Annual Report – Key Performance Indicators 2015 Interim Results 28

  29. Slide 29: Appendix: Historical Owned and Chartered-in Cost

    Appendix: Historical Owned and Chartered-in Cost 2015 Interim Results 29

  30. Slide 30: Appendix: Convertible Bonds Due 2016

    Appendix: Convertible Bonds Due 2016 Issue size US$230 million (US$20.5m face value put back and repaid on 14 April 2014; Remaining: US$210m) 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 Apri

  31. Slide 31: 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

  32. Slide 32: Appendix: Convertible Bonds Due 2021

    Appendix: Convertible Bonds Due 2021 Issue size US$125 million Maturity Date 3 July 2021 (approx. 6 years) Investor Put Date and Price 3 July 2019 (approx. 4 years) at par Coupon 3.25% p.a. payable semi-annually in arrears on 3 January and 3 July Redemption Price 100% Initial Conversion Price HK$4.0

  33. Slide 33: Appendix: Understanding Our Core Market

    Appendix: Understanding Our Core Market Our Focus 2015 Interim Results 33

  34. Slide 34: Appendix: Dry Bulk Supply

    Appendix: Dry Bulk Supply Handysize Orderbook 378 vessels (13.9m dwt) m Dwt 7 8.4% Orderbook as Scrapping as % of Average Over 6 7.2% % of Existing Age 25 Years Existing Fleet 6.8% 32% Fleet (Annualised) 5 Shortfall 4 4.6% Handysize 19% 9 9% 8% (25,000-39,999 dwt) 3 3.3% 2 5.0m 1 3.4m Handymax 24% 8

  35. Slide 35: Appendix: Dry Bulk Effective Demand

    Appendix: Dry Bulk Effective Demand 16.0 14.0 12.0 International cargo volumes 9.1 10.0 Congestion effect 8.0 Tonne-mile effect 6.0 China coastal cargo, off-hire & 4.0 ballast effect 4.0 Net demand growth 2.0 0.0 -2.0 -4.0 -3.1 -6.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1Q15 Source:

  36. Slide 36: Appendix: China Dry Bulk Trade, Iron Ore & Coal Demand

    Appendix: China Dry Bulk Trade, Iron Ore & Coal Demand Chinese Dry Bulk Trade Volume China Coal Demand China Iron Ore Sourcing for Steel Production % of total dry Mil tonnes Bulk trade Mil Tonnes Mil Tonnes 2100 32% 400 1,400 30% 1,301 1,305 28% 28% 350 1800 1,200 1,543 1,543 24% 300 292 1500 1,000

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