Pacific Basin Shipping Limited · HKEX:2343
Pacific Basin Shipping — Deutsche Bank Access China Conference 2011
30 slides from Pacific Basin Shipping's conference presentation, Dec 28, 2010
Slide 1: Q310 Trading Update
Deutsche Bank – Access China Conference 2011 Beijing, January 2011 Pacific Basin Q310 Trading Update 28 Dec 2010
Slide 2: Pacific Basin Overview
Pacific Basin Pacific Basin Overview • One of the world’s leading dry bulk owner/operators of modern handysize and handymax vessels • Pacific Basin Dry Bulk’s business model is highly flexible • Large fleet of uniform, interchangeable, modern vessels • Mix of owned, long-term and short-term chartere
Slide 3: 2010 Third Quarter Highlights
Pacific Basin 2010 Third Quarter Highlights PB Dry Bulk • Overall dry bulk market improved sooner than we expected following a mid-year slow-down, although rates for handysize and handymax segments have trended down since Sept. • Baltic Dry Index has increased 60% since market upturn in July; Q3 ave
Slide 4: Dry Bulk Market Information
Pacific Basin Dry Bulk Market Information Sector Earnings Performance in 2010 versus Average 2009 180% Handysize During 2010, 160% Handysize has been 140% BHSI the best performer 120% Handymax compared to last year 100% BSI Panamax 80% Capesize has spent BPI 60% most of the year Capesize performing
Slide 5: Chinese Dry Bulk Trade
Pacific Basin Chinese Dry Bulk Trade Chinese Dry Bulk Trade Volume China is a Net Importer of Coal Million Tonnes 29% Mil Tonnes 1,200 28% 200 1,000 161 150 127 800 14% 11% 600 8% 100 8% 12% 1076 400 957 50 22 20 427 491 594 648 200 0 0 -216 -221 -129 -142 -50 -255 -258 -200 -100 -400 2005 2006 2007
Slide 6: Chinese Iron Ore Demand
Pacific Basin Chinese Iron Ore Demand China Iron Ore Sourcing for Steel Production Chinese Steel & Iron Ore Prices Million Tonnes US$/Tonne 921 1,000 906 Steel Price Iron Ore Price 900 Steel Price 800 (Hot Rolled Coil) 200 800 700 628 631 720 180 600 640 160 500 560 140 400 278 289 300 480 120 200 4
Slide 7: Dry Bulk Orderbook
Pacific Basin Dry Bulk Orderbook Orderbook as % Average of Existing Fleet Age Mil Dwt Scheduled Orderbook by Year 140 23% Total Dry Bulk >10,000 Dwt 54% (62%) 120 100 17% Capesize 67% (90%) 10.1 80 Panamax 11% 54% (49%) 12.0 60 8% 40 5% Handymax (35,000-59,999 Dwt) 46% (54%) 15.4 20 1% 0 Handysize 3
Slide 8: Dry Bulk Fleet Delivery
Pacific Basin Dry Bulk Fleet Delivery Dry Bulk Fleet Delivery & Scheduled Orderbook 2010 56 million tonnes (11%) Million Dwt delivered to dry bulk fleet Scheduled Orderbook ^ in first nine months of the 140 126 Actual Delivery year 120 100 80 We estimate approximately 56 Brokers’ 60 non-delivery 75
Slide 9: Pacific Basin Dry Bulk
Pacific Basin Pacific Basin Dry Bulk Earnings Coverage (as at 27 Oct 2010) Handysize Handymax Revenue Days (US$/day) Unfixed 28,070 days Fixed 26,100 days 2010 Total combined cover: 96% 19,940 days 2011 Total combined cover: 46% 10,640 days 10,920 days $14,500 $16,670 $14,230 $19,490 $22,470 1,980 d
Slide 10: Dry Bulk Outlook
Pacific Basin Dry Bulk Outlook • Healthy demand for minor bulk commodities • Rapid expansion of dry bulk boosted by weaker US Dollar shipping capacity due to excessive • Seasonally stronger demand, particularly in newbuilding deliveres the grain, iron ore and coal trades • Restocking of Chinese iron
Slide 11: PB Energy & Infrastructure Services
Pacific Basin PB Energy & Infrastructure Services FBSL PB Towage PacMarine PB Sea-Tow PB Towage Australia PB Towage Middle East Towage Fleet: 40 vessels (Offshore Projects) (Harbour Towage) (Offshore Projects) (as at 31 July 2010) 3 Chartered Tugs PB Energy & Infrastructure Services US$m Offshore/pr
Slide 12: Energy & Infrastructure – Outlook
Pacific Basin Energy & Infrastructure – Outlook • Global economic recovery, albeit slow • Rationalisation of containership • Increase in oil and energy prices towage leading to less port calls • Resumption of infrastructure and • US moratorium on deep-water drilling offshore projects exerting downwa
Slide 13: PB RoRo
Pacific Basin PB RoRo Net profit in 1H10: US$0.5 m (1H09: -US$0.4m) Annualised return on net assets: 1% RoRo Orderbook: 15% World RoRo Fleet 41 Vessels 460 Vessels (129,995 Lane Metres) (895,769 Lane Metres) LMs • “Humber Viking” completed satisfactory 1st 60,000 6.2% year on charter to Norfolk Line
Slide 14: RoRo – Outlook
Pacific Basin RoRo – Outlook • European economic recovery to support • Significant RoRo newbuilding deliveries combined modest growth in trailer expected in 2010 and 2011 volumes and short-sea RoRo trades • European austerity measures • Some trades making significant recovery • Flatter recovery in U
Slide 15: Outlook
Pacific Basin Outlook • Focus on three core businesses: PB Energy & Pacific Basin Dry Bulk PB RoRo Infrastructure Services • Overall dry bulk market recovered sooner than expected from a mid- year slow-down; we expect to see a seasonal upswing in the market for handysize bulk carriers from November
Slide 16: 2010 Interim Financial Highlights
Pacific Basin 2010 Interim Financial Highlights As at 30 June 2010 1H10 1H09 Segment net profit 81.1 65.7 Treasury (11.8) (4.4) Non direct G&A (3.7) (4.5) Underlying profit 65.6 56.8 Unrealised derivative (expenses)/income (13.7) 15.0 Future onerous contracts - net provision write-back - 5.5 Net dry
Slide 17: Pacific Basin Dry Bulk – Handysize
Pacific Basin Pacifc Basin Dry Bulk – Handysize As at 30 June 2010 1H10 1H09 Change Revenue days (days) 13,940 12,460 +12% TCE earnings (US$/day) 16,840 13,610 +24% Owned + chartered cost (US$/day) 11,750 9,380 +25% Segment net profits (US$m) 69.7 52.1 +34% Return on net assets (%) 26% 26% - Earning
Slide 18: Daily Vessel Costs - Handysize
Pacific Basin Daily Vessel Costs - Handysize Period ended 30 Jun 2010 Owned Chartered US$/day Blended US$11,750 (FY2009: US$9,690) Opex Charter-hire days & rates Depreciation 2010-2012 Finance cost 14,330 US$13,850 460 US$10,910 Direct overhead Charter-hire 12,820 days US$10,720 10,380 8,770 480 8,6
Slide 19: Impact of Financial Instruments
Pacific Basin Impact of Financial Instruments Period ended 30 June US$ m Realised Unrealised 1H10 1H09 Net Gains / (Losses) Forward freight agreements (4.6) (1.2) (5.8) (12.3) Bunker swap contracts 2.7 (11.1) (8.4) 33.0 Interest rate swap contracts (2.8) (1.4) (4.2) 1.4 (4.7) (13.7) (18.4) 22.1 • Ca
Slide 20: Balance Sheet
Pacific Basin Balance Sheet As at 30 June 2010 PB PB PB US$m Dry Bulk EIS RoRo Treasury 30 Jun 10 31 Dec 09 Vessels & other fixed assets 725 177 194 - 1,122 998 Total assets 874 264 241 950 2,471 2,470 Long term borrowings 192 35 52 594 873 877 Total liabilities 291 45 55 597 1,020 1,014 Net assets
Slide 21: Borrowings and Capex
Pacific Basin Borrowings and Capex As at 3 August 2010 + 15 Nov 2010 announcement Funded from US$970m cash, US$m new borrowings, and 300 future operating cashflows 253 250 230 200 167 Redeemable 150 in Feb 2011 120 114 103 120 100 69 57 50 42 42 40 42 36 23 16 17 18 20 8 9 8 0 2010 2011 2012 2013 20
Slide 22: Cashflow
Pacific Basin Cashflow Period ended 31 June 2010 US$m 1H10 1H09 Operating cash inflows 83 61 Investing cash out / inflows (142) 13 - Vessels & other fixed assets related payments (187) (171) - Sales of vessels - 105 - Jointly controlled entities related payments and receipts (13) 40 - Net receipts f
Slide 23: Disclaimer
Pacific Basin Disclaimer This presentation contains certain forward looking statements with respect to the financial condition, results of operations and business of Pacific Basin and certain plans and objectives of the management of Pacific Basin. Such forward looking statements involve known and u
Slide 24: China at late-Industrialisation Stage
Pacific Basin Appendix: China at late-Industrialisation Stage Steel Consumption Per Capita Tons per Capita China (from 1990) Japan (from 1950) China growth matches Korea (from 1970) 1.0 India (from 2005) historical trend in 0.9 0.8 Japan and Korea 0.7 0.6 0.5 Suggests strong 0.4 growth in dry bulk 0
Slide 25: Dry Bulk Demand
Pacific Basin Appendix: Dry Bulk Demand Dry Bulk Fleet Demand and Supply % Change % change YOY YOY 23.9 25 15 13.0 20 14.4 15.2 12 9.9 15 10.7 9.4 5.6 9 10 7.0 6.8 6.5 7.8 5 6 6.5 0 6.1 3 4.3 0.02 -5 -0.3 3.8 0 -10 -5.9 -8.3 -15 -10.5 -3 Q1 Q2 Q3 Q4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2005 2006 2007 2008 2009 2008
Slide 26: Pacific Basin Dry Bulk - Diversified Cargo
Pacific Basin Appendix: Pacific Basin Dry Bulk - Diversified Cargo Pacific Basin Dry Bulk Cargo Volume Q1-Q3 10 (Handysize and Handymax) Alumina 6% (-1%) Coal / Coke 8% (-2%) Concentrates 11% (+4%) Other Bulks* 5% (0%) 23.2 Fertilisers 8% (0%) Cement & Million Cement Clinker 7% (-1%) Tonnes Logs & F
Slide 27: Pacific Basin Dry Bulk – Handymax
Pacific Basin Appendix: Paciifc Basin Dry Bulk – Handymax As at 30 June 2010 1H10 1H09 Change Revenue days (days) 5,570 5,150 +8% TCE earnings (US$/day) 23,680 19,840 +19% Owned + chartered cost (US$/day) 22,050 17,580 +25% Segment net profits (US$m) 8.8 11.5 -23% Return on net assets (%) 32% 102% -
Slide 28: PB Energy & Infrastructure Services, PB RoRo
Pacific Basin Appendix: PB Energy & Infrastructure Services PB RoRo As at 30 June 2010 1H10 1H09 PB Energy & Infrastructure Services Offshore and project supply and harbour towage services (“Towage”) (1.2) 1.6 Fujairah Bulk Shipping (“FBSL”) 4.5 4.1 PacMarine Services 0.7 0.9 Segment net profit 4.0
Slide 29: Capex and Combined Value by Vessel Types
Pacific Basin Appendix: Capex and Combined Value by Vessel Types As at 3 August 2010 + 15 Nov 2010 announcement Vessels Commitments A Combined View of (including purchase options) Vessel Carrying Values and Commitments US$m Total US$637m US$m Total US$1,795m 300 253 250 1,150 200 91 403 167 150 26 3
Slide 30: Convertible Bonds Due 2016
Pacific Basin 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 H
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