Pacific Basin Shipping Limited · HKEX:2343
Pacific Basin Shipping — FY2006 Earnings Presentation
24 slides from Pacific Basin Shipping's earnings presentation, Mar 5, 2007
Slide 1: Annual Results 2006
Pacific Basin Stock Code: 2343 Annual Results 2006
Slide 2: Results Highlights
Results Highlights y Profits: US$110.3m (2005: 147.1m) y Basic EPS: HK65¢ (90¢) y A year of two halves with 2H profit double 1H - 1H06:US$36.4m, 2H06:US$73.9m y Handysize average daily charter rate: US$15,420/day (17,100/day) y Net cash from operations : US$148.2m (173.3m) y ROE: 36% (54%) y Net Pro
Slide 3: What is Pacific Basin?
What is Pacific Basin? y World’s largest modern handysize vessel owner/ operator y Handysize revenue days grew by 66% from 2004 to 2006 y 16 offices worldwide, 260 shore-based staff, 1000 sea-farers y Highly profitable industry y 2007 Handysize revenue days to grow by further 23% over 2006 y TCE ear
Slide 4: Fleet Profile
Fleet Profile Handysize: 70 Handymax: 7 Core fleet totals 77 vessels Managed Chartered Managed 4 Chartered 4 4 4 Newbuilding 1 Newbuilding 1 Core & short-term vessels Owned Owned 3 2 - totals 99 Operating Lease 16 Chartered 34 Investment Finance Lease 17 programme totals US$ 250 million Newbuilding
Slide 5: Diversified Cargo
Diversified Cargo Total Handysize and Handymax Cargo Volume in 2006 Log & Forest Products 9% Fertilisers 9% Grains 12% Steel & Scrap 6% Other Bulks* 22% 21.1 million mt Cement 11% Ore 5% Agriculture Products 6% 2006 cargo volume grew Concentrates 7% by 59% over 2005 Petcoke 5% Diversity of cargo Coa
Slide 6: China at Early Industrialization Stage
China at Early Industrialization Stage Same growth as Steel Consumption Per Capita historical trend in Tons per capita China (from 1990) Japan and Korea Japan (from 1950) 1.0 Korea (from 1970) 0.9 0.8 Indicating long term 0.7 0.6 dry bulk strong 0.5 growth 0.4 0.3 0.2 Same trend for 0.1 other commod
Slide 7: Financial Highlights
Financial Highlights 2006 2005 TCE Earnings (US$m) 344.8 264.7 Vessel disposals net gain 23.7 23.5 Reported net profit 110.3 147.1 Return on average shareholders equity 36% 54% Basic EPS (HK¢) 65 90 Dividends (HK¢ per share) 42.5 65.0 Payout ratio 71% 73% 7
Slide 8: Results – Handysize Freight & Charter-hire
Results – Handysize Freight & Charter-hire Drivers of the results 1H06 2H06 2006 2005 % Change Revenue days (days) 7,570 8,850 16,420 14,260 +15% TCE earnings (US$/day) 14,400 16,290 15,420 17,100 -10% Owned + chartered cost (US$/day) 8,540 9,160 8,880 7,870 +13% Contribution (US$m) 44.4 63.0 107.4
Slide 9: Results – Handymax Freight & Charter-hire
Results – Handymax Freight & Charter-hire Drivers of the results 1H06 2H06 2006 2005 % Change Revenue days (days) 1,680 3,370 5,050 720 +602% TCE earnings (US$/day) 14,150 17,420 16,330 8,460 +93% Owned + chartered cost (US$/day) 15,920 17,760 17,150 8,400 +104% Contribution (US$m) (3.0) (1.1) (4.1)
Slide 10: Daily Vessel Costs - Handysize
Daily Vessel Costs - Handysize Owned Chartered Opex US$/day 10,500 Blended: $8,880 (2005: $7,870) Depreciation 10,040 10,000 Finance cost 570 500 8,480 8,850 Direct Overhead 9,000 660 Charter-hire 8,000 7,640 960 7,000 970 2,000 2,000 6,000 1,500 5,000 2,530 9,470 8,630 Higher 4,000 2,510 8,190 2,42
Slide 11: Balance Sheet
Balance Sheet 31 Dec 06 31 Dec 05 US$m Net book value of fixed assets 1 741.0 504.3 Gross borrowings 350.5 316.9 Cash 63.2 83.7 Net borrowings 287.3 233.2 Shareholder's equity 485.0 309.3 Net borrowings / Fixed assets 38.0% 45.0% Net borrowings / Shareholder's equity 59.0% 75.0% Note 1 Insured value
Slide 12: Cashflow
Cashflow US$m 2006 2005 Operating cash inflows 148.2 173.3 Investing cash (out)/inflows (241.1) 24.7 - Payments for property, plant and equipment (286.2) (121.2) - Sales of vessels 39.9 139.5 - Others 5.2 6.4 Financing cash in/(out) flows 74.1 (157.5) - Net proceeds from share placement (Nov ’06) 15
Slide 13: Dividends
Dividends High payout – continue to payout at least 50% of annual attributable profits in 2007 Actual payout ratio has consistently exceeded the stated policy Year Dividend US$m HK¢ per share Payout Ratio 2006 Interim (paid 7Sep06) 33.4 20.0 Proposed final (ex-div 29Mar07) 45.1 22.5 Total for year 7
Slide 14: The Baltic Exchange Indices
The Baltic Exchange Indices The Baltic Exchange Dry Index (BDI) The Baltic Exchange Handysize Index (BHSI) $US/day 7000 22,000 US$20,447 6000 5000 20,000 4000 18,000 3000 16,000 2000 14,000 1000 0 12,000 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 May-06 Jul-06 Sep-06 Nov-06 Jan-07 Sources: Blo
Slide 15: Dry Bulk – 1 year Time-Charter Rate
Dry Bulk – 1 year Time-Charter Rate $US/day Handysize Supramax Panamax Capesize 70,000 23 Feb 2007 $63,888 60,000 50,000 40,000 $30,400 30,000 $28,025 20,000 $17,597 10,000 0 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Note: Net Rate, Handysize 1 Year TCE Rate based on PB Benchmar
Slide 16: PB Against the Market
PB Against the Market IHC Pool Earnings vs. Market (2006) US$/day 18,000 IHC Pool Earnings Market 16,000 14,000 12,000 10,000 8,000 Jan-06 Jun-06 Dec-06 We outperform by US$1,800/day or 14% in 2006 Sources: Company data, Clarkson Note: Market defined as Clarkson 1-Yr TCE Net Rate 16
Slide 17: Strong Growth in Dry-bulk Trade
Strong Growth in Dry-bulk Trade World Seaborne Dry Bulk Trade 2002-2006E CAGR mil tonnes 6.3% Historical growth of 3,000 approx. 2% 2,663 2,557 2,453 2,500 2,291 Dry-bulk trade 2,169 estimated to increase over 5% 07/06 2,000 1,500 Significant growth in recent 5 years 1,000 2002 2003 2004 2005 2006E
Slide 18: Tonne-miles: Distance Carried is a Crucial Factor
Tonne-miles: Distance Carried is a Crucial Factor Global trade in major bulks – tonne-miles 2002-2006E CAGR Distances carried 8.7% Billion tonnes are growing 10,000 8,415 9,145 – and continue to do so 9,000 8,000 7,754 7,118 7,000 6,521 8.7% real growth 6,000 driver for 5,000 dry-bulk ship demand 4,
Slide 19: Low Orderbook in Handysize
Low Orderbook in Handysize Type of Vessels Orderbook as % of Existing Fleet Container 44% Tanker 37% All yards are almost full until 2010 Others 21% Dry Bulk 22% Yards prefer to Capesize 100K + Ave. Age build large vessels 31% 11.0 with higher profitability Panamax 60-100K 20% 11.5 Limited supply in
Slide 20: But Even Better- Ageing World Fleet Points to Scrapping
But Even Better- Ageing World Fleet Points to Scrapping Age Profile of Global Handysize (25-35K) – January 2007 No. of Vessels: 1,217 More than 100 10% ≥ 30 Years 29% ≥ 25 Years 55% ≥ 20 Years 58% > 15 Years 29% older 90 than 25 years 80 Orderbook: 70 15% 60 Handysize ave. age is 17.9 years old, 50
Slide 21: Dry Bulk Carrier Sale & Purchase Market
Dry Bulk Carrier Sale & Purchase Market 2nd-hand 5-year old, A 5-year second-hand Handysize (25-35K) vessel value Handysize vessel is now worth approx. US$ m US$28.5m US$31 million 30.0 28.0 Our asset value 26.0 moves in line with 24.0 rising market values 22.0 20.0 - Owned 18.0 - Chartered with 16.
Slide 22: Earnings Coverage
Earnings Coverage Revenue Days Handysize Handymax 25,000 +23% Fixed 20,190 days Unfixed 20,000 16,420 days 42% 15,000 10,000 100% 58% US$15,420 5,050 days 5,040 days 5,000 US$17,000* 3% 100% US$21,560 97% US$16,330 0 2006 2007 2006 2007 Handysize revenue days in 2008: 22,200 days, making satisfactor
Slide 23: Conclusion and Outlook
Conclusion and Outlook y 2006 proposed final dividend: HK22.5¢, 2006 payout: 71% y 2007 Handysize revenue days grow by further 23% over 2006 y 2007 Handysize coverage of 58% at about US$17,000 y Historically high vessel prices up around 24% from 2006 lows* y Low orderbook of 15% of the ageing fleet,
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,
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