Pacific Basin Shipping Limited · HKEX:2343
Pacific Basin Shipping — FY2011 Earnings Presentation
30 slides from Pacific Basin Shipping's earnings presentation, Mar 1, 2012
Slide 1: Annual Results 2011
ANNUAL RESULTS 2011 1 Mar 2012
Slide 2: 2011 Annual Results – Group Highlights
2011 Annual Results – Group Highlights Revenue and Net Profit US$ Million Net Profit US$32m È 69.3% 199 200 159 Underlying Profit US$58m È 52.0% 150 120 104 Operating Cash Flow US$159m È 19.7% 100 58 Cash Position US$618m È 12.1% 50 32 Earnings per Share HK¢ 13 È 69.0% 0 2010 2011 Dividend per Share
Slide 3: Pacific Basin Dry Bulk – 2011 performance
Pacific Basin Dry Bulk – 2011 performance Handysize Handysize daily rate of US$13,530 (‐19% YOY) Dry Bulk net profit US$81.4m Outperformed the deteriorating spot market by 35% Handysize US$89.8m Handymax Handymax US$(8.4)m Handymax daily rate of US$15,090 (‐33% YOY) Operating cash flow US$138m
Slide 4: Pacific Basin Dry Bulk - Earnings Coverage
Pacific Basin Dry Bulk ‐ Earnings Coverage As at 27 Feb 2012 Pacific Basin Dry Bulk Fleet: 169 Handysize Handymax at 23 Feb 2012 Owned Chartered Total Revenue days On the NB On the NB 32,710 days 13,310 days water water 29,070 days 28,240 days 11,450 days Handysize 30 8 77 7 122 24,010 days Handymax
Slide 5: Dry Bulk Market Information
Dry Bulk Market Information Handysize and Handymax remained relatively flat ‐ down 36% overall on 2010 Poor start to 2011 and 2012: Traditional rush of newbuilding deliveries Seasonal demand disruptions in influential dry bulk trade areas e.g. Indian monsoons, heavy rain in Brazil, cyclones
Slide 6: 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 7: Global Dry Bulk Fleet Development
Global Dry Bulk Fleet Development Dry bulk capacity expanded 14% net YOY – driven by 96m tonnes of new deliveries 30% delivery shortfall against scheduled orderbook m dwt Dry Bulk Handysize Heavy influx of newbuildings was moderated by record‐high scrapping 2010 6.4 1.4 Handysize fleet grew
Slide 8: Dry Bulk Orderbook
Dry Bulk Orderbook Handysize Orderbook 443 vessels (15m dwt) m Dwt 16 45% Ship owners ordered >80% less newbuilding capacity in 14 shortfall 2011 due to weak market conditions 15.1m 16.6% 12 139m dwt of new capacity scheduled to deliver in 2012 10 8 We expect 35% delivery shortfall in 2012 8.3
Slide 9: 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 10: PB Energy & Infrastructure Services
Now renamed “PB Towage” PB Energy & Infrastructure Services with effect from 1 January 2012 2011 Performance PB EIS net profit US$10.8m Much improved year led by towage activity PB Towage US$15.2m Capitalised on improved markets for offshore and harbour tugs in PacMarine Service US$0.7m Australa
Slide 11: PB Towage - Outlook
PB Towage ‐ Outlook High oil prices buoying demand for Hesitant global economic recovery new, cleaner, safer fuel sources Potential decline in Chinese industrial Australia striving to become a major production impacting Australian LNG exporter commodity exports and port activity Further im
Slide 12: PB RoRo
PB RoRo 2011 Performance Unsatisfactory performance in a very difficult year ‐ continued depression in Euro‐centric RoRo market PB RoRo net profit US$(10.6)m Our RoRo fleet recorded 84% utilisation, generating average Operating cash flow US$7.5m daily rates of US$21,190 despite very weak charter
Slide 13: PB RoRo - Outlook
PB RoRo ‐ Outlook Scrapping of older ships to increase Continuing economic crisis High fuel prices making modern vessels Weak intra‐European trade more attractive Limited growth in trailer volumes Continued albeit limited development of Significant new RoRo deliveries scheduled in 2012
Slide 14: 2011 Annual Financial Highlights
2011 Annual Financial Highlights 2011 2010 Segment net profit 78.9 146.3 Treasury (12.8) (18.5) Non direct G&A (8.3) (8.0) Underlying profit 57.8 119.8 Unrealised derivative expenses (1.6) (12.4) RoRo vessel impairment charge (80.0) ‐ Gain from sale of shares in Green Dragon Gas 55.8 16.0
Slide 15: Pacific Basin Dry Bulk - Handysize
Pacific Basin Dry Bulk ‐ Handysize 2011 2010 Change Revenue days (days) 32,710 29,070 +13% TCE earnings (US$/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 Equivalent ra
Slide 16: 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 $11,820 14,000 500 12,000 530 10,440 10,000 8,690 8,720 da
Slide 17: Balance Sheet
Balance Sheet PB PB PB US$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 1,544 Net
Slide 18: 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 19: 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 20: 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 21: Outlook
Outlook Dry bulk shipping market is in crisis Excess ship supply + significant contraction in funding for secondhand and newbuilding purchases = opportunity for cash rich ship owners Dry bulk freight rates will be weaker overall in 2012 Outlook for towage market and our PB Towage business is
Slide 22: 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 23: 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 24: Appendix: 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 25: Appendix: Pacific Basin Dry Bulk – Diversified Cargo
Appendix: Pacific Basin Dry Bulk – Diversified Cargo Pacific Basin Dry Bulk Cargo Volume 2011 Petcoke 4% Grains & Agriculture 16% Sugar 4% Products Concentrates 5% Logs & Forest 16% Products Steel & 5% 8% 33.4 Fertilisers Scrap Million Salt 6% Tonnes Coal/Coke 8% Ore 6% 8% Cement & Cement Clinker Al
Slide 26: 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 27: Appendix: 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 28: Appendix: China Iron Ore & Coal Demand
Appendix: China Iron Ore & Coal Demand China is a net importer of coal in 2011 China Iron Ore Sourcing for Steel Production m Tonnes m Tonnes 200 10% 183 1,200 166 1,095 150 1,000 1,002 100 800 11% 687 619 600 50 19 15 383 408 400 0 200 ‐50 2006 2007 2008 2009 2010 2011 0 2004 2005 2006 2007 2008 20
Slide 29: Appendix: 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 30: 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$7.79 (Curren
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