Slide 1: 2011 Interim Results
2011 INTERIM RESULTS 3 August 2011
Slide 2: Pacific Basin Overview
Pacific Basin Overview A world leading dry bulk owner/operator of handysize & handymax vessels Highly flexible Pacific Basin Dry Bulk business model Large fleet of uniform, interchangeable, modern vessels Mix of owned, long-term and short-term chartered ships Diversified customer base of m
Slide 3: 2011 Interim Results - Group Highlights
2011 Interim Results - Group Highlights Revenue and Net Profit US$m Net Profit: US$3m (1H10: US$52m) 83 Underlying Profit: US$19m (1H10: US$66m) 90 66 69 Basic EPS: HK$0.01 (1H10: HK$0.21) 60 52 Annualised ROE: 0% (1H10: 7%) 30 19 Operating cash flow: US$69m (1H10: US$83m) 3 1H11 Dividen
Slide 4: Pacific Basin Dry Bulk 1H11 Performance
Pacific Basin Dry Bulk 1H11 Performance Handysize/ handymax market got off to a weak start in 2011 Demand impacted by weather-related commodity export bottlenecks Excessive newbuilding deliveries Strategy: Dry bulk net profit: US$36m (1H10: US$79m) Maintain a cost-competitive fleet Handy
Slide 5: Dry Bulk Market Information
Dry Bulk Market Information Baltic Dry Index (BDI) vs Secondhand Handysize Vessel Values BHSI (Handysize) and BCI (Capesize) (5 year Old 28,000 Dwt) Handisze Average: US$17,890 US$13,360 US$10,530 Capesize Average: US$34,350 US$28,960 US$m US$8,120 1H10 2H10 1H11 55 5,500 50 5,000 4,500 45 4,000 40
Slide 6: Chinese Dry Bulk Trade - Minor Bulk
Chinese Dry Bulk Trade - Minor Bulk China Imports (m tonnes): i) Forestry Products ii) Manganese Ore iii) Copper Concentrates & Concentrates 38.2 13.0 Chinese Dry Bulk Trade Volume 11.6 6.5 m tonnes 28.9 5.9 1,200 +7% 28% +44% -11% 26% 26% 900 600 14% 06 07 08 09 10 11E 06 07 08 09 10 11E 06 07 08 0
Slide 7: Dry Bulk Demand and Supply
Dry Bulk Demand and Supply % Change YOY Platou estimates 9% demand growth in 2011 (2010: 14%) 20 Expect relative weakness for remainder of 2011 17 Clarksons estimates 17% supply growth in 2011 16 14 12 11 8 9 10 8 7 4 China coastal cargo effect and others Congestion effect Tonne-mile effect In
Slide 8: Dry Bulk Fleet Changes
Dry Bulk Fleet Changes Handysize Age Profile (25,000-39,999 dwt) 2,030 vessels (64.5m dwt) Dry bulk capacity expanded 15% YOY net driven by 1H11 new capacity delivery of 44m dwt 30+ years Handysize expanded 4% net since 2011 11% Approx. 40% delivery shortfall in 1H11 against 25-29 years schedu
Slide 9: Dry Bulk Orderbook
Dry Bulk Orderbook Handysize Scheduled Orderbook 634 vessels (21.7m dwt) - 34% In 1H11: m dwt 15% 14% 73m dwt* new dry bulk capacity scheduled to deliver 10 12% 40% delivery shortfall 8 6 Ship owners ordered >60% less newbuilding capacity 6% 4 in 1H11 YOY due to weak market conditions 6% 2
Slide 10: Pacific Basin Dry Bulk Earnings Coverage
Pacific Basin Dry Bulk Earnings Coverage Pacific Basin Dry Bulk Fleet: 163 at 25 July 2011 at 31 July 2011 Combined coverage: Owned Chartered Total 2011: 86% on the on the NB NB 2012: 36% water water Handysize 30 7 66 8 111 Handysize Handymax Revenue days Handymax 2 6 40 2 50 29,070 days 11,450 days
Slide 11: Pacific Basin Dry Bulk - Outlook
Pacific Basin Dry Bulk - Outlook China’s continued dependence on Continued excessive newbuiding imported minor bulks deliveries Slow steaming because of high fuel Faltering global economic recovery prices and weak market and stimulus withdrawal Scrapping increase Less imports due to Chin
Slide 12: PB Energy & Infrastructure Services
PB Energy & Infrastructure Services PB Energy & Infrastructure Services (US$m) 1H11 1H10 Offshore/project supply & harbour towage services (“Towage”) 3.5 (1.2) PacMarine Services 0.5 0.7 Fujairah Bulk Shipping (“FBSL”) (5.2) 4.5 Segment net profit in 1H11: (1.2) 4.0 Towage Fleet: 43 vessels Annualis
Slide 13: PB Energy & Infrastructure Outlook
PB Energy & Infrastructure Outlook High oil prices buoying demand Faltering global economic for new, cleaner, safer fuel recovery sources Australian commodity exports Australia striving to become a and port activity affected by major LNG exporter tightening policy in China Continued commod
Slide 14: PB RoRo
PB RoRo Segment net profit in 1H11: -US$5.3m (1H10: profit US$0.5m) World RoRo Fleet 438 Vessels (862,453 Lane Metres) Annualised return on net assets: -3% US$80 million impairment of RoRo investment due to reassessment of prospects for the sector, resulting in much 30+ Year 24% weaker outlook
Slide 15: PB RoRo Outlook
PB RoRo Outlook Slow growth in European exports Significant new RoRo deliveries and intra-European trade overall scheduled in rest of year Gradual, slow growth in trailer Most European RoRo operators still volumes have excess capacity and are not Scrapping chartering new vessels High fue
Slide 16: 1H11 Financial Highlights
1H11 Financial Highlights 1H11 1H10 Segment net profit 28.8 81.1 Treasury (5.8) (11.8) Non direct G&A (4.2) (3.7) Underlying profit 18.8 65.6 Unrealised derivative income / (expenses) 8.4 (13.7) Gain from sale of shares in Green Dragon Gas 55.8 - Vessel impairment charges – RoRo (80.0) - P
Slide 17: Pacific Basin Dry Bulk - Handysize
Pacific Basin Dry Bulk - Handysize 1H11 1H10 Change Revenue days (days) 14,620 13,940 +5% TCE earnings (US$/day) 13,660 16,840 -19% Owned + chartered cost (US$/day) 10,640 11,750 -9% Segment net profit (US$m) 42.9 69.7 -38% Return on net assets (%) 13% 26% -13% Earnings: 1H11 TCE rates reflect wea
Slide 18: Daily Vessel Costs - Handysize
Daily Vessel Costs - Handysize Direct overhead Charter-hire Owned Chartered Finance cost As at 30 June 2011 Depreciation Opex Blended US$10,640 (FY10: US$11,970) Charter-hire rates & days 2011-2013 US$/day 16,000 14,700 14,000 500 12,580 12,000 550 $11,690 $11,350 $11,400 10,000 8,690 8,690 8,000 1,
Slide 19: Balance Sheet
Balance Sheet PB PB PB US$m Treasury 30 Jun 11 31 Dec 10 Dry Bulk EIS RoRo Vessels & other fixed assets 926 221 395 - 1,549 1,519 Total assets 1,096 287 408 654 2,524 2,555 Long term borrowings 177 38 56 574 845 860 Total liabilities 306 53 60 576 1,014 1,011 Net assets 790 234 348 78 1,510 1,544 Ne
Slide 20: Borrowing and Capex
Borrowing and Capex As at 30 June 2011 Funded from US$631m cash, new borrowings, and US$ m future operating cashflows 250 230 200 Redeemable in Apr 2014 150 140 135 118 100 76 70 69 54 55 60 37 50 27 36 18 20 20 29 17 8 8 0 2011 2012 2013 2014 2015 2016 2017 2018-2021 Vessel capital commitments (US$
Slide 21: Capex and Combined Value by Vessel Types
Capex and Combined Value by Vessel Types As at 30 June 2011 Vessels Commitments A Combined View of (including authorised commitments) Vessel Carrying Values and Commitments Total US$348m Total US$1,890m 160 140 US$ m 140 1,400 118 1,240 120 1,200 100 39 314 1,000 80 70 115 89 800 60 34 600 429 34 40
Slide 22: Cash Flow
Cash Flow US$m 1H11 1H10 Operating cash inflows 69 83 Investing cash outflows (33) (142) Vessels & other fixed assets related payments (111) (187) Jointly controlled entities related receipts and payment 9 (13) Disposal of our remaining holdings in GDG 81 - Change in restricted cash, structu
Slide 23: Outlook
Outlook We expect: Dry bulk to remain lacklustre for rest of 2011 2011 freight market overall weaker than in 2010 Generally better supply/demand dynamics in minor bulk segments, but unlikely to measurably boost handysize rates Improved dry bulk supply/demand balance next year due mainly to
Slide 24: 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 25: Appendix: Differentiated from BDI & Traditional Ship Owning
Appendix: Differentiated from BDI & Traditional Ship Owning Smaller bulk carrier segment benefits from: Handysize orderbook smaller than ship capacity over 25 years old Diverse range of commodities carried and trade patterns Greater access to ports Growing minor bulk trade imbalances Fleet U
Slide 26: Appendix: Pacific Basin Dry Bulk – Diversified Cargo
Appendix: Pacific Basin Dry Bulk – Diversified Cargo Pacific Basin Dry Bulk Cargo Volume 1H 2011 Sugar Logs & Forest 18% (+6%) 3%(-1%) Products Ore 5% (-2%) Grains & Agriculture 17% (-1%) Products Concentrates 4% (-6%) Other Bulks 8% (+3%) Salt 6% (0%) Steel & 6% (-1%) 14.5 Cement & Scrap m tonnes 7
Slide 27: 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 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 1,200 13% 200 1,129 1,000 166 1,002 150 142 800 8% 669 619 100 600 460 400 383 50 19 18 200 0 0 2004 2005 2006 2007 2008 2009 2010 2011E -50 (1H11 2006 2007 2
Slide 29: Appendix: Pacific Basin Dry Bulk - Handymax
Appendix: Pacific Basin Dry Bulk - Handymax 1H11 1H10 Change Revenue days (days) 6,390 5,570 +15% TCE earnings (US$/day) 15,130 23,680 -36% Owned + chartered cost (US$/day) 16,190 22,050 -27% Segment net (loss)/profits (US$m) (7.5) 8.8 -185% Return on net assets (%) -19% 32% -51% Earnings: 1H11 TC
Slide 30: Appendix: Impact of Financial Instruments
Appendix: Impact of Financial Instruments US$m Realised Unrealised 1H11 1H10 Net Gains / (Losses) Forward freight agreements (0.7) 0.9 0.2 (5.8) Bunker swap contracts 6.7 7.9 14.6 (8.4) Interest rate swap contracts (2.8) (0.4) (3.2) (4.2) 3.2 8.4 11.6 (18.4) Contracts to be settled in future perio
Slide 31: 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