Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping — Investor Presentation (November 2013)
35 slides from Great Eastern Shipping's investor presentation, November 2013
Slide 1: Business & Financial Review November 2013
The Great Eastern Shipping Co. Ltd. Business & Financial Review November 2013 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 65 years of operations $ 29 years of uninterrupted dividend track record Shareholding Pattern as on September 30, 2013 Public FIIs 24% 25% Govt/FI 17% Promoters Bodies 29% Co
Slide 5: Shipping business-owned fleet
Shipping business-owned fleet 30 ships aggregating 2.42 Mn dwt, avg.age 9.0 years 22 Tankers avg.age 9.5 years - 8 Crude carriers (4 Suezmax, 4 Aframax) avg.age 10.2 years - 13 Product tankers (4 LR1, 8 MR, 1 GP) avg.age 7.5 years - 1 LPG Carrier (1 VLGC) avg. age 23.0 years 8 Dry bulk carrier
Slide 6: Shipping business- CAPEX plan
Shipping business- CAPEX plan Total committed CAPEX: ~ USD 114 mn Newbuilding: - 1 Medium Range (MR) Product Tanker with STX Group - expected delivery Q4FY15 - 2 Kamsarmax Dry Bulk Carriers with Tsuneishi Shipbuilding - expected delivery H1FY16 Secondhand - 1 Very Large Gas Carrier (1994 built)- exp
Slide 7: Asset Price Movement (5 yr old)- Tankers
0 20 40 60 80 100 120 140 160 180 Source: Clarkson 2001‐01 2001‐05 2001‐09 2002‐01 VLCC 2002‐05 2002‐09 2003‐01 2003‐05 2003‐09 Suezmax 2004‐01 2004‐05 2004‐09 MR 2005‐01 2005‐05 2005‐09 2006‐01 2006‐05 2006‐09 2007‐01 2007‐05 2007‐09 Amt in US$ mn 2008‐01 2008‐05 2008‐09 Timeline- Jan 2001 till Nov
Slide 8: Asset Price Movement (5 yr old) – Dry Bulk
‐ 20 40 60 80 100 120 140 160 Source: Clarkson 2001‐01 2001‐05 2001‐09 2002‐01 2002‐05 2002‐09 2003‐01 Capesize 2003‐05 2003‐09 2004‐01 2004‐05 Panamax 2004‐09 2005‐01 2005‐05 2005‐09 2006‐01 2006‐05 Supramax 2006‐09 2007‐01 2007‐05 2007‐09 Amt in US$ mn 2008‐01 2008‐05 2008‐09 Timeline- Jan 2001 ti
Slide 9: Asset Price Movement
Asset Price Movement 20 year High /Low: (5 year old assets) (Amt in $mn) High Low Current Tankers VLCC 165 49 56 (2008) (1994) Suezmax 105 32 40 (2008) (1993) MR 46 20 28 (2007) (1999) Dry Bulk Capesize 155 25 40 (2008) (1999) Panamax 92 14 23 (2007) (1999) Supramax 75 13 24 (2007) (1998) 9 Source:
Slide 10: BDTI & BCTI Movement (Jan 2001 to Nov 2013)
BDTI & BCTI Movement (Jan 2001 to 11 Nov’ 2013) 3500 BDTI BCTI 3000 2500 2000 1500 1000 500 0 Sluggish demand & steady fleet growth keeping the TCYs low 10 Source: Clarkson
Slide 11: Global Oil Demand Scenario
Global Oil Demand Scenario Global Oil demand growth Region wise demand growth 4% % chg 3.6% mn.bpd 2011 2012 2013(E) (CY13 over CY12) 2.9% 3% N.America 24.1 23.8 23.8 - 2.3% 2% OECD Europe 14.3 13.8 13.6 (1.5)% 1.6% 1.6% 1.3% 1.0% 1.1% 1.0% OECD Pacific 1% (Japan& Korea) 8.1 8.5 8.3 (2.4)% Asia 0% (
Slide 12: Oil Trade – Changing patterns...
Oil Trade – Changing patterns... Oil supply dynamics changing Oil demand sourcing matrix changing US – Shale revolution China & India in forefront Iran – Hit by sanctions Latin America – Increase in imports North Sea – Decreasing Supply of Refined Products Venezuela – Diversifying Customer base West
Slide 13: Products Trade… Promising Future
Products Trade… Promising Future ¾ Global refinery crude distillation capacity set to rise by 9.5 mb/d from 2013 to 2018, Asia accounting for about 60% and M.E about 22%. ¾ Total world refining capacity will reach 106.7 mb/d by the end of 2018, of which 60% will be in non- OECD countries. ¾ US refin
Slide 14: Products trade… Evolving Trade Patterns
Products trade… Evolving Trade Patterns 14
Slide 15: BDI Movement (Jan 2001 to Nov 2013)
BDI Movement (Jan 2001 to 11 Nov’ 2013) 14000 China announces 12000 $586 bn stimulus 10000 2008 market 8000 crash, BDI dropped by 94% Cargo growth 6000 but record NB deliveries 4000 2000 0 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 BDI hovering at low
Slide 16: Seaborne Bulk Trade … growing steadily
Seaborne Bulk Trade … growing steadily 4500 Global dry bulk seaborne trade 4000 reached 4.0 bn tons in 2012 3500 Contribution to seaborne trade growth by commodity 3000 2500 50% 2000 45% 1500 40% 35% 1000 30% 500 25% 0 20% Mn.tons 2005 2006 2007 2008 2009 2010 2011 2012 2013 15% Iron Ore Coal Grains
Slide 17: Dry Bulk Trade … Evolving Trade Patterns
Dry Bulk Trade … Evolving Trade Patterns China… imports to continue India… catching up ‐Iron ore & Coal imports running at a ‐To be leading coal importer in the steady pace world ‐ Coastal trade to firm up due to inland ‐ Developing ports to specifically suit transport restrictions the trade ‐ UMPPs
Slide 18: China’s dependency on imported iron ore
China’s dependency on imported iron ore CHINA: Iron ore import dependency has increased from 37% in 2001 to 70% in 2012 and growing. Main Import Drivers ¾ Domestic Iron ore (Fe) content < 25% and declining. ¾ Expensive domestic Cost of prodn. due to: ‐ Labor & energy cost Inflation has been 15% YoY
Slide 19: 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 Fleet growth 2002‐2012 (mn dwt) 2002 2007 2012 % change (2012 over 2002) Dry 295 393 679 130% Crude 222 280 357 60% Product 74 106 136 83% 19 Source: Clarkson
Slide 20: … Fleet continues to grow
… Fleet continues to grow World Fleet addition* Fleet CY2013 CY2014 CY2015 + (as on 1st Nov’13) (in mn dwt) Crude tankers 364 2% 5% 3% Product tankers 138 1% 6% 4% Dry bulk carriers 714 3% 8% 6% *includes only new building from yards … but high slippages & cancellations expected 20 Source: Clarkson
Slide 21: Scrapping… too little to cheer
Scrapping… too little to cheer Scrapping as % of world fleet (year wise) Fleet as on Scrapping CY2013 1st Nov’13 (in mn dwt) CY2010 CY2011 CY2012 YTD* (in mn dwt) 364 Crude 2% 2% 3% 2% 138 Product 4% 2% 2% 2% 714 Bulk 1% 4% 5% 3% * As of 8 Nov’13 Require acceleration in scrapping to minimize the dem
Slide 22: Global Shipbuilding… Shrinkage in Capacity
Global Shipbuilding… Shrinkage in Capacity Capacity to contract due to combination of: ¾ yard closures ¾ return to pre-boom business models such as ship repairs ¾ use of shipbuilding berths and workforces for non-shipbuilding activity ¾ reduction in berth productivity ~ Half of Chinese yards having
Slide 23: Global Shipbuilding… Shrinkage in Capacity
Global Shipbuilding… Shrinkage in Capacity Yard Output (mn.gt) 60 50 40 30 20 10 0 2002 2006 2008 2010 2011 2012 2013 Yard output to decline from a peak of 49 mn gt in 2010 to 32 mn gt in 2013 …. A decline of 35% 2013 (e) yard capacity still higher than the pre boom capacity of 2006 23 Source: Indus
Slide 24: Greatship (India) Limited Business & Financial Review
Greatship (India) Limited (a 100% subsidiary) Business & Financial Review November 2013 24
Slide 25: Offshore business- Fleet Profile
Offshore business- Fleet Profile The Greatship Group ¾ Current Owned Fleet 9 3 Jack Up Rigs (350ft) 9 4 Platform Supply Vessels (PSV) 9 9 Anchor Handling Tug cum Supply Vessels (AHTSV) 9 2 Multipurpose Platform Supply and Support Vessels (MPSSV) 9 6 Platform / ROV Support Vessels (ROVSV) On Order: 1
Slide 26: 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 - Higher utilization rates Revenue Demand shifting to modern vessels, especially as Efficiencies - Minimum down time safety becomes a major concern for oil companies Tech
Slide 27: 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 28: E&P Activities – Steady Growth
E&P Activities – Steady Growth Global E&P Spending 2014 E&P spending breakup - National Oil Companies remain the largest - Global E&P spending to increase to ~$650bn in 2014 contributor to the E&P spending - Up 4% from 2013 - Energy security: key concern for every nation E&P spending to remain at a
Slide 29: Global Fleet Supply -Offshore
Global Fleet Supply -Offshore ¾ ~ Half of the world offshore vessel fleet is more than 22 years ¾ Average age of existing jackup rig fleet is about 24 years (Nos) Jackup Rigs AHTSVs PSV/Supply Current Fleet 623 2,899 2,131 Orderbook 110 184 426 % of O/B to current fleet 18% 6% 20% As of end Oct’13 ‐
Slide 30: Financial Highlights Q2 FY 2014
FINANCIAL HIGHLIGHTS Q2 FY 2014 30
Slide 31: Q2FY 2014 Financial Highlights
Q2FY 2014 Financial Highlights Standalone Key Figures Consolidated Q2FY'14 Q2FY'13 H1FY’14 (Amount in Rs. crs) Q2FY'14 Q2FY'13 H1FY’14 Income Statement 425.02 359.50 973.22 Revenue (including other income) 839.17 692.36 1758.61 206.34 77.02 502.27 EBITDA (including other income) 456.93 292.65 980.91
Slide 32: Q2FY 2014 Financial Highlights
Q2FY 2014 Financial Highlights Standalone Key Ratios Consolidated Q2FY'14 Q2FY'13 H1FY’14 Key financial figures Q2FY'14 Q2FY'13 H1FY’14 48.55% 21.42% 51.61% EBITDA Margin (%) 54.45% 42.27% 55.78% 5.06% (3)% 8.32% Return on Equity (ROE) (%) 9.59% 5.21% 12.43% 5.60% (0.19)% 7.40% Return on Capital Emp
Slide 33: Q2FY 2014 Performance Highlights
Q2FY 2014 Performance Highlights Breakup of revenue days Revenue Days Q2’FY14 Q2’FY13 Owned Tonnage 2,591 2,509 Inchartered Tonnage - 107 Total Revenue Days 2,591 2,616 Total Owned Tonnage (mn.dwt) 2.42 2.60 Mix of Spot & Time Days (in %) Q2’FY14 Q2’FY13 Dry Bulk Average TCY Details Spot % 48% 86% T
Slide 34: Book Value & Net Asset Value (NAV) comparison
Book Value & Net Asset Value (NAV) comparison Last 4 quarters Consol. Book Value Consol. NAV (Rs. Per share) (Rs. Per share) September 2013 444 532 June 2013 439 494 March 2013 416 433 December 2012 421 428 34
Slide 35: Thank You
THANK YOU visit us at www.greatship.com 35
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