Pacific Basin Shipping Limited · HKEX:2343
Pacific Basin Shipping — Q1 2012 Earnings Presentation
29 slides from Pacific Basin Shipping's earnings presentation, Apr 18, 2012
Slide 1: 1Q 2012 Trading Update
1Q 2012 TRADING UPDATE 18 April 2012
Slide 2: 2012 First Quarter Highlights
2012 First Quarter Highlights Pacific Basin Dry Bulk Handysize and Handymax market rates declined to 3‐year lows before partially recovering Seasonally stronger activity expected to temporarily support recently improved rates in 2Q Global Handysize capacity expanded by only 1% net in 1Q12 ‐ si
Slide 3: Pacific Basin Dry Bulk - Earnings Coverage
Pacific Basin Dry Bulk ‐ Earnings Coverage Pacific Basin Dry Bulk Fleet: 167 As at 16 April 2012 As at 16 April 2012 Owned Chartered Total Handysize Handymax On the NB On the NB water water Revenue days Handysize 30 8 74 7 119 32,710 days 31,370 days 13,310 days Handymax 3 6 35 2 46 Post‐Pmax 1 0 1
Slide 4: Dry Bulk Market Information
Dry Bulk Market Information Market freight rates for Handysize and Handymax declined 34% and 49% in first six weeks of 2012 before partially recovering By contrast, Capesize rates fell over 80% ‐ no significant recovery to date Poor start to 2011 and 2012: Surge in newbuilding deliveries S
Slide 5: Dry Bulk Demand
Dry Bulk Demand Dry Bulk Fleet Effective Demand % Change % change YOY YOY 25 13.8 15 13.0 20 15 13.3 12.4 12 9.6 10 8.5 9 4.5 6.1 5 6 4.3 3.8 0 3 ‐5 0 1.4 ‐10 ‐3 ‐15 2005 2006 2007 2008 2009 2010 2011E Q1 Q2 Q3 Q4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2008 2009 2010 2011E China coastal cargo, off‐hire
Slide 6: Global Dry Bulk Fleet Development
Global Dry Bulk Fleet Development Handysize Age Profile (25,000‐39,999 dwt) Dry bulk capacity expanded 3.4% net during 1Q, 2,084 vessels (66.7m dwt) and 14% net YOY Heavy influx of newbuildings was partially offset 30+ years 9% by record‐high scrapping 25‐ 29 years 0‐ 15 years Handysize fleet
Slide 7: Dry Bulk Orderbook
Dry Bulk Orderbook Handysize Orderbook 482 vessels (17m dwt) m Dwt 12 16.1% Ship owners ordered >50% less new capacity in Jan/Feb 10 due to weak market conditions 50% 8 shortfall 139m dwt of new capacity scheduled to deliver in FY12 * 6 5.2.m 7.1% We expect 30‐35% delivery shortfall in 2012 4
Slide 8: Pacific Basin Dry Bulk - Outlook
Pacific Basin Dry Bulk ‐ Outlook China’s continued dependence on Continued excessive newbuilding deliveries imported minor bulks Hesitant global economic recovery Slow steaming because of high fuel prices impacted by continued crisis in Europe and weak market Potentially weaker growth in t
Slide 9: PB Towage
PB Towage PB Towage Fleet: 43 vessels 1Q12 Performance (as at 16 April 2012) Australasian oil and gas project activity continues to grow and drive demand for our offshore project towage services Container line and dry bulk export activity continues to impact positively on demand for our harbour
Slide 10: PB Towage - Outlook
PB Towage ‐ Outlook High oil prices buoying demand for Hesitant global economic recovery new, cleaner, safer fuel sources Potential decline in Chinese industrial Australia striving to become a major production impacting Australian LNG exporter commodity exports and port activity Further im
Slide 11: PB RoRo
PB RoRo 1Q12 Performance RoRo charter market remains depressed Earnings cover is currently in place for 36% of 2012 capacity at US$19,380/day More positive outlook in longer term ‐ limited newbuilding orders, scrapping of older ships Business Highlights 2011 Completion of RoRo newbuilding pr
Slide 12: PB RoRo - Outlook
PB RoRo ‐ Outlook Scrapping of older ships to increase Continuing economic crisis High fuel prices making modern vessels Weak intra‐European trade more attractive Limited growth in trailer volumes Continued albeit limited development of Significant new RoRo deliveries scheduled in 2012
Slide 13: Outlook
Outlook Dry bulk shipping market is in crisis ‐ market freight rates in 2012 will be weaker overall than 2011 Seasonally stronger activity to temporarily support recently improved Handysize rates in 2Q Outlook for towage market and our PB Towage business is promising Another challenging year
Slide 14: Daily Vessel Costs - Handysize
Daily Vessel Costs ‐ Handysize Direct overhead As at 31 Dec 2011 Charter-hire Finance cost Owned Chartered Depreciation Opex Blended US$10,680 (2010: US$11,970) Charter‐hire rates & days 2012‐2014 US$/day 16,000 14,700 12,340 $11,150 $11,630 $11,820 14,000 500 12,000 530 10,440 10,000 8,690 8,720 da
Slide 15: Capex and Combined Vessel Value
Capex and Combined Vessel Value As at 31 Dec 2011 Vessels Commitments A Combined View of (including authorised commitments) Vessel Carrying Values and Commitments Total US$322m Total US$1,842m US$ m US$ m 180 171 1,400 1,242 160 16 1,200 140 131 306 1,000 120 75 116 100 800 80 102 600 60 820 386 400
Slide 16: Borrowing and Capex
Borrowing and Capex As at 31 Dec 2011 Funded from US$618m cash, US$117m undrawn facilities, and US$ m future operating cashflows 250 230 200 Redeemable in Apr 2014 171 150 131 130 100 70 69 48 49 37 50 30 36 17 18 20 20 24 17 8 0 2012 2013 2014 2015 2016 2017 2018 2019‐2023 Vessel capital commitment
Slide 17: Cash Flow
Cash Flow 2011 Sources and Uses of Group Cash Flow US$ Million Operating cash flow US$159.4m 1,000 +29.7 950 +80.0 EBITDA US$149.9m 900 Operating cash to EBITDA 1.1x +159.4 850 800 750 ‐174.5 +703.4 700 650 ‐105.2 +14.7 +618.2 600 ‐53.4 ‐35.9 550 500 1 Jan 11 Operating Sale of Increase in Capex Conv
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,
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
Slide 20: Our Dry Bulk Business Model
Appendix: Our Dry Bulk Business Model Largest owner and operator of modern Handysize ships with 9% share of global fleet of 21 offices globally – including 14 modern (max 15 years) 25,000‐40,000 dwt bulk dry bulk offices across 6 continents carriers Localised chartering and operations Scale
Slide 21: Pacific Basin Dry Bulk - Diversified Cargo
Appendix: Pacific Basin Dry Bulk – Diversified Cargo Pacific Basin Dry Bulk Cargo Volume 1Q12 Sugar 3% Grains & Agriculture 19% Products Ore 4% Salt 5% Fertilisers 12% Alumina 6% 7.5 Logs & Forest 9% Coal/Coke 6% Million Products Tonnes Other Bulks 6% Concentrates 8% Steel & Scrap 7% Cement & Petcok
Slide 22: 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 23: Chinese Dry Bulk Trade - Minor Bulk
Appendix: Chinese Dry Bulk Trade ‐ Minor Bulk China Imports (m tonnes): i) Forestry Products ii) Manganese Ore iii) Copper Concentrates Chinese Dry Bulk Trade Volume 39.6 +37% m tonnes 13.0 28.9 6.5 6.4 1200 11.6 +12% -1% 28% 26% 900 25% 600 13% 11% 06 07 08 09 10 11 06 07 08 09 10 11 06 07 08 09 10
Slide 24: China Iron Ore & Coal Demand
Appendix: China Iron Ore & Coal Demand China is a net importer of coal in 2012 China Iron Ore Sourcing for Steel Production m Tonnes m Tonnes 250 1,200 1,095 1,081 183 9% 200 200 1,000 -1% 150 800 746 687 9% 100 600 50 408 15 400 335 13 0 200 -50 0 2006 2007 2008 2009 2010 2011 2012E 2004 2005 2006
Slide 25: 2011 Annual Financial Highlights
Appendix: 2011 Annual Financial Highlights 2011 2010 Segment net profit 78.9 146.3 Treasury (12.8) (18.5) Non direct G&A (8.3) (8.0) Underlying profit 57.8 119.8 Unrealised derivative expenses (1.6) (12.4) RoRo vessel impairment charge (80.0) ‐ Gain from sale of shares in Green Dragon Gas
Slide 26: Balance Sheet
Appendix: Balance Sheet PB PB PB US$m Dry Bulk EIS RoRo Treasury 31 Dec 11 31 Dec 10 Vessels & other fixed assets 936 214 370 ‐ 1,525 1,519 Total assets 1,107 291 375 596 2,432 2,555 Long term borrowings 298 34 48 399 779 860 Total liabilities 407 59 52 401 947 1,011 Net assets 700 232 323 195 1,485
Slide 27: Pacific Basin Dry Bulk - Handysize
Appendix: Pacific Basin Dry Bulk ‐ Handysize 2011 2010 Change Revenue days (days) 32,710 29,070 +13% TCE earnings (US$/day) 13,530 16,750 ‐19% Owned + chartered costs (US$/day) 10,680 11,970 ‐11% Net profit (US$m) 89.8 136.1 ‐34% Return on net assets (%) 16% 22% ‐6% Earnings: 2011 Time Charter Equ
Slide 28: Pacific Basin Dry Bulk - Handymax
Appendix: Pacific Basin Dry Bulk ‐ Handymax 2011 2010 Change Revenue days (days) 13,310 11,450 +16% TCE earnings (US$/day) 15,090 22,570 ‐33% Owned + chartered costs (US$/day) 15,840 21,690 ‐27% Net (loss)/profits (US$m) (11.4) 8.8 ‐228% Contribution from Post Panamax (US$m) 3.0 ‐ ‐ Net (loss)/profi
Slide 29: 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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