Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping — Q2 FY2023 Earnings Presentation
42 slides from Great Eastern Shipping's earnings presentation, Nov 14, 2022
Slide 1: Exchange filing cover letter
Our Ref.: S/2022/JMT November 12, 2022 BSE Limited National Stock Exchange of India Limited 1st Floor, Phiroze Jeejeebhoy Towers, Exchange Plaza, 5th Floor, Plot No. C/1, Dalal Street, Bandra Kurla Complex, Bandra (East), Mumbai – 400 001 Mumbai – 400 051 BSE Scrip code: 500620 Trading Symbol - GESH
Slide 2: Q2 & H1 FY23 Earnings Presentation
Q2 & H1 FY23 Earnings Presentation 14 November 2022
Slide 3: 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 4: H1FY23 Highlights
H1FY23 HIGHLIGHTS • Highest ever half yearly profits for our company • Highest ever Net Asset Value (both Standalone and Consolidated) • First time ever: Balance sheet to have more cash than debt GE Shipping – Q2 & H1FY23 Results 3
Slide 5: Reported Highlights
REPORTED HIGHLIGHTS St an d al on e Con s l i d at e d • GE Shipping H1FY23 consolidated Net Profit at Q2 Q2 H1 Q2 Q2 H1 INR 1,226 Cr Fig in INR Crores FY23 FY22 FY23 FY23 FY22 FY23 • Declared 2nd interim In come St at e me n t dividend of INR 7.20/Share Revenue* 1,402 788 2,567 1,700 953 3,098 EBIT
Slide 6: Normalised Financials
NORMALISED FINANCIALS o The impact of the exchange rate on foreign currency loans and current assets and liabilities, including cash and bank balances, has been removed o NCD & Currency Swap: o Funds raised through NCDs have been swapped into USD using INR-FCY swaps, thus creating synthetic fixed ra
Slide 7: Normalised Financial Highlights
NORMALISED FINANCIAL HIGHLIGHTS Standalone Conslidated • GE Shipping H1FY23 consolidated Net Profit Q2 Q2 H1 Q2 Q2 H1 at INR 1,240 Cr Fig in INR Crores FY23 FY22 FY23 FY23 FY22 FY23 • Declared 2nd interim Income State me nt dividend of INR Revenue* 1,402 788 2,567 1,700 953 3,098 7.20/Share for FY20
Slide 8: Normalised Financial Highlights
NORMALISED FINANCIAL HIGHLIGHTS Standalone Conslidated Q2 Q2 H1 Q2 Q2 H1 FY23 FY22 FY23 FY23 FY22 FY23 Ke y Financial Figure Return on Equity (ROE%)** 38% 16% 33% 33% 11% 29% Return on Capital Employed (ROCE%)** 26% 11% 22% 23% 8% 20% Gross Debt/Equity (x) 0.48 0.62 0.48 0.53 0.66 0.53 Net Debt/Equi
Slide 9: Normalised Financials – Key Ratios
NORMALISED FINANCIALS – KEY RATIOS Earnings per Share (INR/Share) Cash Profit per Share (INR/Share) Standalone Consolidated Standalone Consolidated 55 51.21 63.89 47.62 45 55.65 35.65 48.21 35 32.55 40.55 25 14.30 16.96 27.84 15 9.11 15.36 24.96 25.62 24.84 18.01 14.79 23.34 13.11 18.47 12.46 16.94
Slide 10: Consistent Dividend Payouts
CONSISTENT DIVIDEND PAYOUTS 16 15.0 13.5 14 12.6 11.5 12 11.0 10.0 10.1 9.9 10 9.0 9.0 9.0 8.0 8.0 8.1 8 7.5 7.2 6.5 8.0 6.5 6 5.4 3.1 4.0 4.0 4.0 4 3.3 3.0 2.3 2.8 2.4 2.3 2.0 2 2.0 1.5 0 Dividend Per Share (INR/Share) GE Shipping – Q2 & H1FY23 Results 9
Slide 11: Profit & Loss Statement – Industry Format
PROFIT & LOSS STATEMENT – INDUSTRY FORMAT Standalone Conslidated Q2 Q2 H1 Q2 Q2 H1 Figures in INR Crores FY23 FY22 FY23 FY23 FY22 FY23 Operating Revenue 1,239 705 2,396 1,440 866 2,799 Less: Direct Operating Expenses/Voyage Expenses 311 168 633 317 178 645 Time C har ter Equiv alent ( A) 928 537 1,7
Slide 12: Shareholding Pattern
SHAREHOLDING PATTERN FII/FPI 24% Promoters 30% Govt./FI/Corp 21% Public 25% 30-SEPTEMBER-2022 GE Shipping – Q2 & H1FY23 Results 11
Slide 13: Management Commentary
MANAGEMENT COMMENTARY Mr. Bharat K Sheth Deputy Chairman & Managing Director “In the first quarter, we mentioned that all four of our shipping sectors did well. In this quarter, the crude and product tanker freight markets became even stronger, which more than compensated for lower dry bulk rates. T
Slide 14: Performance Review
PERFORMANCE REVIEW Breakup of Revenue Days (Shipping) Q2 Q2 Revenue Days FY23 FY22 Owned Tonnage 3,761 4,028 Inchartered Tonnage 267 - Total Revenue Days 4,028 4,028 Total Owned Tonnage (mn.dwt) 3.44 3.57 Breakup of Revenue Days (Offshore) Q2 Q2 Revenue Days FY23 FY22 Offshore Logistics 1,523 1,227
Slide 15: Performance Review
PERFORMANCE REVIEW Avg TCYs in Various Categories Q2 Q1 QoQ Q2 YOY Avg (TCYs USD/Day) FY23 FY23 % FY22 % Crude Carriers 33,076 28,852 15% 10,515 215% Product Carriers 35,691 25,745 39% 8,198 335% LPG Carriers 31,235 26,196 19% 28,789 8% Dry Bulk 21,882 27,235 -20% 30,117 -27% GE Shipping – Q2 & H1FY
Slide 16: Changes in Standalone NAV (YTD)
CHANGES IN STANDALONE NAV (YTD) INR/SHARE GE Shipping – Q2 & H1FY23 Results 15
Slide 17: Years Movement in Standalone NAV
5 YEARS MOVEMENT IN STANDALONE NAV Standalone NAV – Continue to touch new highs 900 809 800 CAGR: 17% 700 INR/SHARE 600 500 337 400 300 200 100 0 FY17 FY18 FY19 FY20 FY21 FY22 H1FY23 GE Shipping – Q2 & H1FY23 Results 16
Slide 18: Revenue Coverage
REVENUE COVERAGE Coverage of Operating Days (Shipping) H1 Category FY23 Crude Carriers 26% Product Carriers 27% LPG Carriers 100% Dry Bulk 41% Coverage of Operating Days (Off-Shore) H1 Revenue Days FY23 Jack Up Rigs 89% AHTSV 84% MPSVV 13% PSV/ROVSV 89% GE Shipping – Q2 & H1FY23 Results 17
Slide 19: Standalone Debt Repayment Schedule
STANDALONE DEBT REPAYMENT SCHEDULE GESCO Standalone (USD mn) 90 500 80 81 80 74 450 70 447 66 400 60 350 60 300 50 250 40 200 30 150 20 100 10 50 0 0 Sep-22 Mar-23 Mar-24 Mar-25 Mar-26 Mar-27 Loan Repayments Loan O/S (RHS) 1) Prepaid USD 45 Mn of ECB debt in H1FY23. 2) Effective all-in USD cost of d
Slide 20: Fleet Profile
FLEET PROFILE Fleet Profile - Shipping DWT Fleet (11 Nov'22) Fleet FY23 No Avg Age Crude Carriers* 947,968 7 14.50 Product Carriers 1,092,465 18 14.67 Gas Carriers* 185,363 4 16.99 Dry Bulk Carriers 1,210,805 14 9.59 Total 3,436,601 43 12.96 Fleet Profile - Offshore Avg Years Fleet No. of Units Yrs.
Slide 21: Shipping Market
QL Tie Great Fasten \ Shipping Co. Ltd. SHIPPING MARKET
Slide 22: Crude and Product Tankers
CRUDE AND PRODUCT TANKERS Avg. Suezmax Earnings (USD/day) Avg. MR Earnings (USD/day) 90,000 45,000 80,000 40,000 70,000 35,000 60,000 30,000 50,000 25,000 40,000 20,000 30,000 15,000 20,000 10,000 10,000 5,000 0 0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ja
Slide 23: Crude and Product Tankers
CRUDE AND PRODUCT TANKERS • Crude tanker earnings have trended upwards in Q2 with increase in crude production from US/MEG and shifts in Russian exports (away from EU and towards Asia) and European imports (increased purchases from the MEG/US/WAF) • Product tanker market earnings remained at very at
Slide 24: Dry Bulk
DRY BULK DB Freight softened in H1FY23 Y-O-Y, but Sub-Capes outperformed Capes Avg. Baltic Capesize 5T/C Earnings (USD/day) Avg. Baltic Supra BSI-58 10T/C Earnings 70,000 (USD/day) 40000 60,000 35000 50,000 30000 40,000 25000 20000 30,000 15000 20,000 10000 10,000 5000 0 0 Apr May Jun Jul Aug Sep Oc
Slide 25: Dry Bulk
DRY BULK • During the quarter, spot earnings for both Capes (down 68 %) & Sub – Capes (down 45 %) were significantly lower on a y-o-y basis. Sub capes continued to outperform the Capesize earnings on an absolute basis. On a q-o-q basis, spot earnings across all asset categories dropped 35 % mainly d
Slide 26: LPG Gas
LPG GAS Avg. VLGC Earnings (USD/day) VLGC Spot earnings sustained healthy levels during H1 FY- 100,000 23 and were higher YoY in comparison to H1 FY-22. 90,000 80,000 70,000 USD/day YTDFY22 YTDFY23 % change 60,000 7M 29,028 45,899 58% 50,000 40,000 30,000 20,000 10,000 April May June July Aug Sep Oc
Slide 27: Fleet Supply
The Great Fastern Shipping Co. Ltd FLEET SUPPLY
Slide 28: Lowest Order Book to Fleet Ratio
LOWEST ORDER BOOK TO FLEET RATIO Historic Order Book as a % of fleet 90% 80% 70% 60% 50% 40% Current Orderbook 30% 4.88% 20% 3.86% 6.89% 10% 0% 2014 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2015 2016 2017 2018 2019 2020 2021 2022 Crude Tankers Product Tankers Bulker
Slide 29: Asset Price Movement
ASSET PRICE MOVEMENT THE GREAT EASTERN SHIPPING CO. LTD.
Slide 30: Asset Price Movement (Indexed Over Last 5 Yrs)
75 85 95 105 115 125 135 145 90 100 110 120 130 150 160 140 Oct-17 Oct-17 Jan-18 Jan-18 Apr-18 Apr-18 Jul-18 Jul-18 Oct-18 Oct-18 Sources: Industry Reports Jan-19 Jan-19 GE Shipping – Q2 & H1FY23 Results Apr-19 Apr-19 Jul-19 Jul-19 Oct-19 Oct-19 Jan-20 Jan-20 Apr-20 Apr-20 Capesize Suezmax Jul-20 Ju
Slide 31: Scrapping
SCRAPPING Fleet (Mn Dwt) Vessel Category Oct'22 Crude 450 Product 180 Dry Bulk 967 Scrapping (% Beginning world fleet) 9M CY CY CY CY CY CY CY CY Vessel Category CY2022 2021 2020 2019 2018 2017 2016 2015 2014 Crude 0.74 2.47 0.53 0.55 4.39 2.43 0.39 0.38 1.75 Product 0.88 2.11 0.57 0.60 1.72 1.22 0.
Slide 32: Greatship (India) Limited – 100% Subsidiary
GREATSHIP (INDIA) LIMITED 100% SUBSIDIARY
Slide 33: Fleet Supply – Increasing Number of Cold Stacked Rigs
FLEET SUPPLY – INCREASING NUMBER OF COLD STACKED RIGS Number Jack-up Rigs PSV+AHTSV Current Fleet 489 3,471 Under Contract Fleet 356 2,187 Order Book 25 106 O/B to Current Fleet 5.1% 3.1% Total Scrapping since Jan 2016 (Nos) 143 574 No of Vessels/Rigs more than 20/30 years old (% Fleet) 33% 19% Cold
Slide 34: Market Trends: Utilisation
200 250 300 350 400 450 Jan 2010 May 2010 Sep 2010 Jan 2011 GE Shipping – Q2 & H1FY23 Results May 2011 Sep 2011 Jan 2012 May 2012 Sep 2012 Jan 2013 May 2013 Sep 2013 Jan 2014 May 2014 Sep 2014 Jan 2015 May 2015 Sep 2015 MARKET TRENDS: UTILISATION Rigs Under Contract Jan 2016 May 2016 Sep 2016 Jan 20
Slide 35: Repricing
REPRICING One JU Rig will start her new 3-year contract in Q3FY23 and will come up for repricing only in H2FY26 Vessels Rigs 6 6 4 1 1 1 1 1 0 0 H2 FY23 H1 FY24 H2 FY24 H1 FY25 H2 FY25 GE Shipping – Q2 & H1FY23 Results 34
Slide 36: Debt Repayment Schedule
DEBT REPAYMENT SCHEDULE GIL (USD Mn) 120 160 140 100 97 147 120 80 100 60 80 60 40 36 40 20 14 20 0 0 Sep-22 Mar-23 Mar-24 Mar-25 Repayments Loan O/S (RHS) GE Shipping – Q2 & H1FY23 Results 35
Slide 37: Financials
‘The Great Eastern Shipping Co. Ltd. FINANCIALS
Slide 38: Counter Cyclical Investments Generated Strong Cash Flows
COUNTER CYCLICAL INVESTMENTS GENERATED STRONG CASH FLOWS 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 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 H1FY2023 Net Debt Net Debt to Equity 37
Slide 39: Share Price to Consolidated NAV
SHARE PRICE TO CONSOLIDATED NAV INR/Share 1000 1 900 0.9 800 0.8 700 0.7 600 0.6 500 0.5 400 0.4 300 0.3 200 0.2 100 0.1 0 0 FY16 FY17 FY18 FY19 FY20 FY21 FY22 H1FY23 Consolidated NAV Standalone NAV Share Price/Consol. NAV (RHS) * For H1FY23 we have taken share price as on 11th November 2022 38
Slide 40: Great Eastern CSR Foundation
GREAT EASTERN CSR FOUNDATION GECSRF supports NGOs working under health, education and livelihoods CURRENT PARTNERS EDUCATION HEALTH LIVELIHOODS GE Shipping – Q2 & H1FY23 Results 39
Slide 41: Initiatives on Environment
INITIATIVES ON ENVIRONMENT • Reduced our annual CO2 emissions by about 40,000 tons between FY2019 and FY2022, by investing in various energy saving technologies. • Created an ESG profile of our company based certain ESG metric. The profile is available on our website under “SUSTAINABILITY” tab • Vol
Slide 42: Thank You
THANK YOU Visit us at www.greatship.com From a modest beginning… ...to most admired globally 1948 2022 Read the Story of GE Shipping – Coffee Table Book GE Shipping – Q2 & H1FY23 Results 41
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