Pacific Basin Shipping Limited · HKEX:2343

Pacific Basin Shipping — H1 2013 Earnings Presentation

31 slides from Pacific Basin Shipping's earnings presentation, Aug 1, 2013

  1. Slide 1: Interim Results 2013

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  2. Slide 2: 2013 Interim Results – Group Highlights

    2013 Interim Results – Group Highlights 1H13 1H12 Underlying Profit US$13.6m US$3.2m EBITDA US$59.4m US$53.7m Underlying Profit US$m Net Profit / (Loss) US$0.3m US$(195.9)m 13.6 Earnings per Share HK¢0.1 HK¢(79) Cash Position US$442.3m US$753.5m (31 Dec) 3.2  Group results were impacted by: 1H12 1H

  3. Slide 3: Pacific Basin Dry Bulk – 1H13 Performance

    Pacific Basin Dry Bulk – 1H13 Performance 1H13 Handysize US$ million  Handysize daily rate: US$9,290 (-12% YOY) Dry Bulk net profit 11.3  PB outperformed spot market by 32%  Handysize contribution 22.4  Respectable performance reflects value of our industrial and  Handymax contribution 4.3 cust

  4. Slide 4: Pacific Basin Dry Bulk – Earnings Coverage

    Pacific Basin Dry Bulk – Earnings Coverage Handysize Handymax As at 22 July 2013 39,800 16,420 Uncovered Strong dry bulk Days Days Covered business model 33,060 1H Completed Days 28,740 enables us to 2H 64% Days 10,680 2H 66% outperform the US$9,350 Days US$10,060 2H 64% spot market: US$11,710 83% 2

  5. Slide 5: Dry Bulk Market Information

    Dry Bulk Market Information  Continued oversupply of larger ships impacted freight rates across all dry bulk segments  Lowest half-year average BDI since 1986  Handysize and Handymax freight rates significantly outperformed rates for larger Capesize ships  Increased buying interest and owners’ r

  6. Slide 6: Dry Bulk Demand

    Dry Bulk Demand Dry Bulk Effective Demand Chinese Minor Bulk Imports % change YOY Million tonnes 30 14 YTD Imports have 25 increased 13% YOY 12 25 24 23 21 21 10 7.3% 20 8 6 5.1% 15 4 15 2 10 2013 2012 0 2011 2010 -2 5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -4 China imports of a basket of 7

  7. Slide 7: Global Dry Bulk Fleet Development

    Global Dry Bulk Fleet Development Handysize Age Profile (25,000-39,999 dwt) net fleet growth: Handysize Dry Bulk overall 2,137 vessels (68.8m dwt) 1 Jan – 30 June +1% +3% 30+ years 6% 25-29 years 13% 0-15 years Dry bulk net fleet growth: 11%  Driven by 35m tonnes of new capacity 70% 70%  Partially

  8. Slide 8: Dry Bulk Orderbook

    Dry Bulk Orderbook Handysize Orderbook 323 vessels (11.3m dwt) Million dwt 6 7.8%  New orders for large vessels increased significantly YOY 5 41% 6.9% due to lack of availability and increasing price of high-quality, Shortfall modern secondhand ships 5.7% 4 4.7% 3 3.8%  Handysize orderbook down fr

  9. Slide 9: Pacific Basin Dry Bulk – Outlook

    Pacific Basin Dry Bulk – Outlook  China’s continued strong demand for minor  Excessive newbuilding capacity, especially in bulks despite slower economic growth China, and competition from shipyards to win  Continued US economic recovery and reviving new orders industrialisation in North America 

  10. Slide 10: PB Towage – 1H13 Performance

    PB Towage – 1H13 Performance 1H13 Performance 1H13  Continued strong demand for marine logistics, offshore construction US$ million support and harbour towage solutions Towage net profit 12.6  Steady growth in harbour towage sector EBITDA 19.8  Continued activity across a number of LNG projects R

  11. Slide 11: PB Towage – Outlook

    PB Towage – Outlook  Growth in Australian bulk exports and port  Volatile global markets and hesitation in infrastructure development global economic recovery, amplified by a  Exclusive licences in a number of bulk ports credit squeeze in China, impacting growth in up for tender in 2015 onwards d

  12. Slide 12: 2013 Interim Financial Highlights

    2013 Interim Financial Highlights US$m 1H13 1H12 Segment net profit 25.8 18.2  Treasury (4.3) (0.9)  Discontinued Operations - RoRo (0.8) (8.5)  Non direct G&A (7.1) (5.6) Underlying profit 13.6 3.2  Unrealised derivative expenses (3.5) (9.1)  RoRo vessel exchange loss & impairment charge (8.3)

  13. Slide 13: Pacific Basin Dry Bulk

    Pacific Basin Dry Bulk Handysize 1H13 1H12 Change Revenue days (days) 23,740 19,210 +24% TCE earnings (US$/day) 9,290 10,540 -12% Owned + chartered costs (US$/day) 8,280 9,250 -11% Handysize contribution (US$m) 22.4 22.8 -2% Handymax contribution (US$m) 4.3 (1.4) +407% Post Panamax contribution (US$

  14. Slide 14: Daily Vessel Costs – Handysize

    Daily Vessel Costs – Handysize As at 30 June 2013 Charter-hire Finance cost Inward Charter Depreciation Commitments Opex Owned Chartered US$/day Including finance lease vessels Daily charter hire rates & days Blended US$8,280 (FY2012: US$8,910) 2013-2015 12,000 $10,520 $10,080 10,000 9,340 $8,990 8,

  15. Slide 15: Balance Sheet

    Balance Sheet PB PB Discontinued US$m Dry Bulk Towage Treasury RoRo 30 Jun 13 31 Dec 12 Vessels & other fixed assets 1,250 181 - - 1,436 1,270 Total assets 1,501 249 544 32 2,347 2,470 Long term borrowings 466 25 366 - 857 931 Total liabilities 616 39 373 3 1,051 1,138 Net assets 885 210 171 29 1,29

  16. Slide 16: Borrowings and Capex

    Borrowings and Capex The Group had cash balances of US$442m, borrowings of US$857m and a net borrowings ratio of 29% against the Net Book Value of property, plant and equipment US$m 250 230 200 Redeemable in Apr 2014 167 150 140 124 Redeemable in Oct 2016 100 83 84 77 65 50 31 38 36 29 28 22 18 18 5

  17. Slide 17: Cash Flow

    Cash Flow 1H2013 Sources and Uses of Group Cash Flow US$ m 900 Operating cash flow US$34.5m EBITDA US$59.4m 800 +35 +754 2H13 cash levels expected to be affected by: 700  Drawdown from US$67 million unutilised ECA facility -76  New loan facilities to be secured using our existing 50 unmortgaged ve

  18. Slide 18: Our Outlook and Strategy

    Our Outlook and Strategy We are focused on growth in our two core businesses Dry Bulk  Robust business model enables outperformance of the market, outperformance of larger ships  Expect Handy bulk market to remain weak in the rest of 2013  Demand to remain relatively healthy, but market needs tim

  19. Slide 19: 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,

  20. Slide 20: Appendix: Pacific Basin Overview

    Appendix: Pacific Basin Overview  A leading dry bulk owner/operator of Handysize & Handymax dry bulk ships  Flexible Pacific Basin Dry Bulk business model  Large fleet of uniform, interchangeable, modern ships  Mix of owned and long-term, short-term chartered ships  Operating mainly on long ter

  21. Slide 21: How we create value

    Appendix: How we create value Our large, flexible Fleet Our strong corporate profile  Large scale, high-quality dry bulk fleet  Founded in 1987  Interchangeable nature provides flexibility  Strong balance sheet enhancing our to customers and ability to optimise profile as a preferred counterpart

  22. Slide 22: Pacific Basin Dry Bulk – Diversified Cargo

    Appendix: Pacific Basin Dry Bulk – Diversified Cargo Pacific Basin Handysize and Handymax Cargo Volume 1H13 Minerals Agricultural Products Salt 3% 9% Grains & Agricultural Products 16% Sand & Gypsum 6% Fertiliser 8% Sugar 4% 28% Metals 18% 22.4 Alumina 4% Ores 8% Million Tonnes Concentrates & Other

  23. Slide 23: 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.

  24. Slide 24: China Dry Bulk Trade, Iron Ore & Coal Demand

    Appendix: China Dry Bulk Trade, Iron Ore & Coal Demand Chinese Dry Bulk Trade Volume China is a significant net importer China Iron Ore Sourcing of coal in 1H13 for Steel Production % of total dry m tonnes bulk trade m tonnes m tonnes 400 1,400 1,200 32% 1,245 29% 28% 350 1,134 1,200 27% 26% 309 900

  25. Slide 25: Pacific Basin Dry Bulk – Handymax

    Appendix: Pacific Basin Dry Bulk – Handymax 1H13 1H12 Change Revenue days (days) 9,050 6,940 +30% TCE earnings (US$/day) 10,570 11,520 -8% Owned + chartered costs (US$/day) 10,060 11,720 -14% Handymax contribution (US$m) 4.3 (1.4) +407% Post Panamax contribution (US$m) 2.9 2.8 +4% Total contribution

  26. Slide 26: Daily Vessel Costs – Handymax

    Appendix: Daily Vessel Costs – Handymax Charter-hire As at 30 June 2013 Finance cost Depreciation Inward Charter Opex Commitments Owned Chartered US$/Day Daily charter hire rates & days Blended US$10,060 (FY2012: US$11,240) 2013-2015 14,000 $13,720 $12,880 12,000 11,430 10,250 $10,190 10,000 8,550 8

  27. Slide 27: Towage Segment Operating Performance Before Overheads

    Appendix: Towage Segment Operating Performance Before Overheads As at 30 June 2013 US$m % 30 15 12.0% Operating performance US$22.3m 25 11.5% 12 22.3 22.1 Direct overheads US$(9.7)m 20 9 Segment net profit US$12.6m 15 39.4 15.2 15.3 6 EBITDA US$19.8m 10 3 5 6.4 6.2 0 0.5 0.8 0 1H12 1H13 Offshore & I

  28. Slide 28: Appendix: Capex and Combined Vessel Value

    Appendix: Capex and Combined Vessel Value A Combined View of Vessels Commitments Vessel Carrying Values and Commitments Total US$298m Total US$1,735m US$m US$m 180 167 1,600 1,555 160 298 1,400 140 52 1,200 120 113 100 1,000 84 80 800 20 60 600 1,144 115 40 29 400 3 64 18 20 180 26 18 200 0 0 2H13 2

  29. Slide 29: Appendix: PB RoRo

    Appendix: PB RoRo US$ Million 2H13 2014 2015 Total Interest Income - Treasury 3.8 6.1 2.9 12.8 Exchange Losses - Unallocated - (5.0) - (5.0) Total 3.8 1.1 2.9 7.8  Considered a discontinued operation  2012: Agreed sale of all 6 RoRos to Grimaldi for Eur153m (approx. US$188m)  All 6 vessels to be

  30. Slide 30: Convertible Bonds Due 2018

    Appendix: Convertible Bonds Due 2018 Issue size US$123.8 million Maturity Date 22 October 2018 (6 years) Investor Put Date and Price 22 October 2016 (4 years) at par PB’s Call Option 1) Trading price for 30 consecutive days > 130% conversion price in effect 2) >90% of Bond converted / redeemed / pur

  31. Slide 31: 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$7.98 (Curren

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