Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping — Investor Presentation (November 2014)
38 slides from Great Eastern Shipping's investor presentation, November 2014
Slide 1: Business & Financial Review
The Great Eastern Shipping Co. Ltd. Business & Financial Review November 2014 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 subsidiary Greatship (India) Limited - Logistics Crude Tankers Product Tankers - Drilling 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 66 years of operations 30 years of uninterrupted dividend track record Shareholding Pattern as on September 30, 2014 Public FIIs 22% 24% Govt/FI 17% Promoters Bodies 31% Corporate
Slide 5: Shipping business-owned fleet
Shipping business-owned fleet 30 ships aggregating 2.45 Mn dwt, avg.age 9.8 years 21 Tankers avg.age 10.4 years - 8 Crude carriers (4 Suezmax, 4 Aframax) avg.age 11.2 years - 11 Product tankers (4 LR1, 7 MR) avg.age 7.2 years - 2 Very Large Gas Carrier avg.age 22.0 years 9 Dry bulk carriers avg.age
Slide 6: Shipping business- CAPEX plan
Shipping business- CAPEX plan Vessels on Order Vessel Yard CAPEX: ~ USD 180 mnExpected Total committed –ADD YR Delivery WISE 1 Medium Range Product TankerCAPEX BRK UP) STX Group Q4FY16 2 Kamsarmax Dry Bulk Carriers Tsuneishi Shipbuilding H1FY16 3 Kamsarmax Dry Bulk Carriers Jiangsu New Yangzi Shipbu
Slide 7: Asset Price Movement (5 yr old)- Tankers
Asset Price Movement (5 yr old)- Tankers Timeline- Jan 2001 till Oct 2014 Amt in US$ mn VLCC Suezmax MR 2013 2013 (Average) (Average) 2013 2013(Jan (Jan- -Oct) July) 2014 2014(Jan (Jan--Oct) July) 180 80 80 60 60 160 40 40 140 20 20 - - 120 VLCC VLCC Suezmax Suezmax MR MR 100 80 60 40 20 0 2002-01 2
Slide 8: Asset Price Movement (5 yr old) – Dry Bulk
Asset Price Movement (5 yr old) – Dry Bulk Timeline- Jan 2001 till Oct 2014 Amt in US$ mn Capesize Panamax Supramax 2013 2013 (Average) (Average) 2013 2013(Jan (Jan- Oct) - July) 2014 2014(Jan (Jan- -Oct) July) 160 60 60 40 40 140 20 20 120 - - Capesize Capesize Panamax Panamax Supramax Supramax 100
Slide 9: Asset Price Movement
Asset Price Movement 20 year High /Low: (5 year old assets) (Amt in $mn) High Low Current Tankers 165 49 VLCC 77 (2008) (1994) 105 32 Suezmax 54 (2008) (1993) 46 20 MR 25 (2007) (1999) Dry Bulk 155 25 Capesize 42 (2008) (1999) 92 14 Panamax 21 (2007) (1999) 75 13 Supramax 22 (2007) (1998) 9 Source:
Slide 10: BDTI & BCTI Movement (Jan 2001 to Oct 2014)
BDTI & BCTI Movement (Jan 2001 to Oct 2014) BDTI BCTI 3500 Seasonal uptick in BDTI led by Winter demand, 3000 strong demand pull due to Chinese SPR program 2500 and favorable Brent Dubai Swap 2000 1500 1000 500 0 Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec
Slide 11: Higher supply could lead to continued downward pressure on prices
Higher supply could lead to continued downward pressure on prices 96 mbpd 3.5 3 94 2.5 92 2 90 1.5 88 1 0.5 86 0 84 -0.5 82 -1 80 -1.5 2009 2010 2011 2012 2013 2014E 2015P Global Demand Global Supply Global Oil Demand - Change (RHS) Global Oil Supply - Change (RHS) E: Estimates; P: Projections 11 So
Slide 12: OPEC production to determine the direction of oil prices
OPEC production to determine the direction of oil prices 12 Source: Industry Reports
Slide 13: Crude Oil Trade – Changing patterns...
Crude Oil Trade – Changing patterns... Oil supply dynamics changing Oil demand sourcing matrix changing US – Shale revolution China & India in forefront Libya- Coming back??? US refineries operating at record utilization Refinery closures in OECD Europe, OPEC – Production Cuts??? Australia, Japan Ca
Slide 14: Crude Oil Trade – Changing patterns...
Crude Oil Trade – Changing patterns... OIL OIL OIL OIL OIL OIL OIL OIL OIL OIL 14 Source: Industry Reports
Slide 15: Significant new Refining capacity additions coming up in Asia and Middle East
Significant new Refining capacity additions coming up in Asia and Middle East… The latest IEA report (June) expects about 1.4m–1.5m bpd of added global refining capacity annually for 2014–2017. Asia-Pacific and Middle East to account for three-fourth of the total refinery additions US refining secto
Slide 16: Leading to overcapacity, potential closures in the OECD region
Leading to overcapacity, potential closures in the OECD region, lower utilization along with scaling back of certain planned expansions Refining Capacity Rationalization Chinese CDU expansions vs. previous projections Expansion in Latin America could witness delays China stalls new projects on loomi
Slide 17: Growing Product trade… Increasing volumes, distances and triangulation opportunities
Growing Product trade… Increasing volumes, distances and triangulation opportunities Japanese refinery shutdowns Chinese refinery expansion being delayed due to weak domestic demand growth 17 Source: Industry Reports
Slide 18: BDI Movement (Jan 2001 to Oct 2014)
BDI Movement (Jan 2001 to Oct 2014) China announces BDI $586 bn stimulus 14000 12000 Cargo growth but Robust 2008 market record NB growth in iron 10000 crash, BDI deliveries ore imports 8000 dropped by 94% from China 6000 4000 2000 0 Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun
Slide 19: Seaborne Bulk Trade … growing steadily
Seaborne Bulk Trade … growing steadily 5000 Global dry bulk seaborne trade 4500 reached 4.3 bn tons in 2013 4000 3500 Contribution to seaborne trade growth by commodity 3000 40% 36% 2500 35% 34% 2000 30% 1500 24% 1000 25% 500 20% 0 15% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (E) (F) 1
Slide 20: Dry Bulk Trade …Driven by Iron Ore Volumes
Dry Bulk Trade …Driven by Iron Ore Volumes Until 2016, iron ore seaborne trade will be a function of available international supplies Additional supplies Australia – 142 mt Brazil- 82 mt Other 61 mt Post 2016, iron ore seaborne trade to be directed by demand and price arbitrage 20 Source: Industry R
Slide 21: Dry Bulk Trade …Declining Chinese iron ore quality
Dry Bulk Trade …Declining Chinese iron ore quality Imported Iron Ore Steel Output 9M 2013 601 586 9M 2014 699 614 2013 820 775 2012 744 717 2011 686 683 2010 619 637 2009 628 572 2008 444 503 2007 383 489 2006 326 419 2005 275 353 2004 208 283 mn tonnes 2003 148 222 0 200 400 600 800 1000 21 Source:
Slide 22: Dry Bulk Trade …Lack luster Chinese coal imports
Dry Bulk Trade …Lack luster Chinese coal imports take the sheen off !!!...India to become the growth driver.. India coal imports 180 168 160 146 140 120 103 100 100 80 73 69 59 60 40 20 0 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 H1 FY 2015 India Coal Imports (mt) 22 Source: Industry Reports
Slide 23: Dry Bulk Trade …Indonesian bauxite & nickel ore exports plunged to zero
Dry Bulk Trade …Indonesian bauxite & nickel ore exports plunged to zero following the ban Imports from Philippines have increased in 2014. However, exports from the country have not reached the volumes shipped from Indonesia prior to the ban 23
Slide 24: World Fleet Growth
World Fleet Growth 800 700 Dry Bulk Crude Product 600 500 400 300 200 100 0 Mn.dwt 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (Nov 1) Fleet growth 2002-2013 % change Fleet % change (mn dwt) 2003 2008 2013 (2013 over (1st Nov’14) over 2013 2003) Dry 302 418 724 240% 754 4.2% Cru
Slide 25: … Fleet expected to grow
… Fleet expected to grow World Fleet Fleet CY2014 CY2015 CY2016+ addition* (1st Nov’14) (in mn dwt) Crude tankers 364.1 2% 4% 8% Product tankers 141.9 2% 6% 7% Dry bulk carriers 754.3 3% 9% 9% *includes only new building from yards … but high slippages may happen 25 Source: Clarkson
Slide 26: Scrapping… too little to cheer
Scrapping… too little to cheer Scrapping as % of world fleet (year wise) Fleet as on Scrapping Vessel Category CY2010 CY2011 CY2012 CY2013 1st Nov’14 (Jan-Nov) 2014 (in mn dwt) (in mn dwt) 364 6.2 Crude 2% 2% 3% 2% 142 1.5 Product 5% 2% 2% 2% 754 13.7 Bulk 1% 4% 5% 3% Require acceleration in scrappi
Slide 27: Greatship (India) Limited
Greatship (India) Limited (a 100% subsidiary) Business & Financial Review September 2014 27
Slide 28: Offshore business- Fleet Profile
Offshore business- Fleet Profile The Greatship Group Current Owned Fleet 3 Jack Up Rigs (350ft) 4 Platform Supply Vessels (PSV) 9 Anchor Handling Tug cum Supply Vessels (AHTSV) 2 Multipurpose Platform Supply and Support Vessels (MPSSV) 6 Platform / ROV Support Vessels (ROVSV) On Order: 1 Jackup Rig
Slide 29: Greatship's Modern & Technologically Advanced Fleet
Greatship’s Modern & Technologically Advanced Fleet Young Fleet Young fleet with an average age of approx. 4 years by FY 2013-14 - Higher utilization rates Revenue Demand shifting to modern vessels, especially as Efficiencies - Minimum down time safety becomes a major concern for oil companies Techn
Slide 30: Offshore Service Value Chain
Offshore Service Value Chain Exploration Development Production Length of - 3 to 5 years - 2 to 4 years - 5 to 55 years Typical Cycle - Collection of survey data - Construction & installation of - Management of oil & gas production platforms, production - Analysis & interpretation Description pipeli
Slide 31: Rising concerns on E&P spending outlook
Rising concerns on E&P spending outlook Increased capital discipline, focus towards improving shareholder returns and low oil prices could lead to moderation in E&P spending Impact likely to be higher on Deep and Ultra deepwater projects 31 Source: DNB
Slide 32: Global Fleet Supply – Offshore
Global Fleet Supply – Offshore (Nos) Jackup AHTSVs PSV / Rigs Supply Current Fleet 495 2,049 1,451 Orderbook 144 187 356 % of O/B to 29% 9% 25% current fleet • High fleet growth to impact rates • However, utilization for modern assets to be higher • Potential scrapping as current world fleet of jack
Slide 33: Financial Highlights Q2 FY 2015
FINANCIAL HIGHLIGHTS Q2 FY 2015 33
Slide 34: Q2FY 2015 Financial Highlights
Q2FY 2015 Financial Highlights Standalone Key Figures Consolidated Q2 FY15 Q2 FY14 H1FY15 (Amount in Rs. crs) Q2 FY15 Q2 FY14 H1FY15 Income Statement 548.77 425.02 1042.79 Revenue (including other income) 960.36 839.17 1866.41 243.35 206.34 461.79 EBITDA (including other income) 459.56 456.93 928.13
Slide 35: Q2FY 2015 Financial Highlights
Q2FY 2015 Financial Highlights Standalone Key Figures Consolidated Q2 FY15 Q2 FY14 H1FY15 Q2 FY15 Q2 FY14 H1FY15 44.34% 48.55% 44.28% EBITDA Margin (%) 47.85% 54.45% 49.73% 8.76% 5.06% 8.03% Return on Equity (ROE) (%) 11.57% 9.59% 12.26% 7.65% 5.60% 7.15% Return on Capital Employed (ROCE) (%) 8.61%
Slide 36: Q2 FY 2015 Performance Highlights
Q2 FY 2015 Performance Highlights Breakup of revenue days Revenue Days Q2’FY15 Q2’FY14 Owned Tonnage 2,603 2,590 Inchartered Tonnage 0 0 Total Revenue Days 2,603 2,590 Total Owned Tonnage (mn.dwt)* 2.45 2.42 * As on 30th September, 2014 Mix of Spot & Time Days (in %) Q2’FY15 Q2’FY14 Average TCY Deta
Slide 37: Book Value & Net Asset Value (NAV) comparison
Book Value & Net Asset Value (NAV) comparison Last 4 quarters Consol. Book Consol. NAV Value (Rs. Per share) (Rs. Per share) September 2014 480 558 June 2014 468 560 March 2014 449 550 December 2013 454 539 37
Slide 38: THANK YOU
THANK YOU visit us at www.greatship.com 38
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