Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping Company — Investor Presentation (March 2023)
17 slides from Great Eastern Shipping's investor presentation, Mar 17, 2023
Slide 1: The Great Eastern Shipping Company
17th March 2023 The Great Eastern Shipping Company
Slide 2: Disclaimer
DISCLAIMER 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 directions, pros
Slide 3: GESCO – Celebrating 75 Years of Excellence
GESCO – CELEBRATING 75 YEARS OF EXCELLENCE From a modest beginning with our first ship: ..to most admired globally with 43 top quality Jag Vijay… ships 1948 2023 GE Shipping – March 2023 3
Slide 4: Business Segments
BUSINESS SEGMENTS Shipping Offshore Presence - Global presence with Presence – Global, but majority of different asset classes assets in India Business Model - Mix of spot and Business model - Efficiently managing time, Managing cycles, Quality assets portfolio by fixing long term charters a
Slide 5: Fleet Profile
FLEET PROFILE Fleet Profile - Shipping DWT Fleet (17 Mar'23) Fleet FY23 No Avg Age Crude Carriers 947,968 7 14.85 Product Carriers 1,092,465 18 15.01 Gas Carriers 185,363 4 17.33 Dry Bulk Carriers 1,210,805 14 9.93 Total 3,436,601 43 13.30 Fleet Profile - Offshore Avg Years Fleet No. of Units Yrs. J
Slide 6: Investment Thesis
INVESTMENT THESIS Fleet operated at global Offshore fleet – quality standards, with a large operations with low number of international balance sheet leverage customers Prudent Capital Allocation Strong cash flows across a diversified fleet Strong balance sheet High level of operating enables capaci
Slide 7: Why the Large Spot Exposure?
WHY THE LARGE SPOT EXPOSURE? • We have found that over long periods a consistent spot strategy will produce better earnings than a consistent time charter strategy • Having ships on the spot market also gives them more liquidity in the sale and purchase market • We have therefore had a large part of
Slide 8: Why Do We Hold So Much Cash?
WHY DO WE HOLD SO MUCH CASH? • Risk Capital – we always provide for unexpected events in the market, and do not want to be under financial stress in bad times • Having cash gives us freedom to make optimal spot versus time charter decisions without pressure from lenders • It also enables us to buy w
Slide 9: Counter Cyclical Investments Generated Strong Cash Flows - Standalone
COUNTER CYCLICAL INVESTMENTS GENERATED STRONG CASH FLOWS - STANDALONE USD Mn Net Debt Expansion Phase Net Debt Reduction Phase 400 0.60 350 0.50 300 0.40 250 200 0.30 150 0.20 100 0.10 50 - - -50 (0.10) -100 (0.20) FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 9MFY2023 Net Debt Net Debt to Equity
Slide 10: Market Dynamics
MARKET DYNAMICS GE Shipping – March 2023 10
Slide 11: Demand and Supply Dynamics - Shipping
DEMAND AND SUPPLY DYNAMICS - SHIPPING Demand: Supply: 1) Demand for ships is difficult to forecast – it is 1) Orderbook is historically at one of the lowest not just global commodity demand but also point for Tankers & Dry Bulk trade patterns/flows of exporting and importing countries 2) Limited Yar
Slide 12: Demand and Supply Dynamics - Offshore
DEMAND AND SUPPLY DYNAMICS - OFFSHORE • Heavy demand from Middle Eastern NOCs Saudi Aramco and ADNOC has absorbed around 40-45 more jackup rigs • Modern rig utilization (contracted + future contracted) troughed at 60-65% in 2016-17. This has now moved to ~ 90% • Contract rates for jackup rigs have m
Slide 13: Consolidated NAV – Continue to touch new highs
5 YEARS MOVEMENT IN CONSOLIDATED NAV Consolidated NAV – Continue to touch new highs 1200 1048 1000 CAGR: 20% INR/SHARE 800 600 426 400 200 0 31-Dec-17 FY18 FY19 FY20 FY21 FY22 31-Dec-22 GE Shipping – March 2023 13
Slide 14: Changes in Consolidated NAV (9M FY 23)
CHANGES IN CONSOLIDATED NAV (9M FY 23) INR/SHARE GE Shipping – March 2023 14
Slide 15: Share Price to Consolidated NAV
SHARE PRICE TO CONSOLIDATED NAV INR/Share 1200 1 0.9 1000 0.8 0.7 800 0.6 600 0.5 0.4 400 0.3 0.2 200 0.1 0 0 FY16 FY17 FY18 FY19 FY20 FY21 FY22 9MFY23 Consolidated NAV Standalone NAV Share Price/Consol. NAV (RHS) * For 9MFY23 we have taken share price as on 16th March 2023 15 GE Shipping – March 20
Slide 16: Way Forward – Key points
Way Forward – Key points • We continue to have significant spot exposure in shipping • If the cycle sustains, we will have high cash accruals, and consequently higher capital available for dividends/fleet renewal/expansion • If the market weakens on a sustained basis, asset prices should follow the
Slide 17: Thank You
THANK YOU Visit us at www.greatship.com From a modest beginning… ...to most admired globally 1948 2023 Read the Story of GE Shipping – Coffee Table Book GE Shipping – March 2023 17
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