Pacific Basin Shipping Limited · HKEX:2343
Pacific Basin Shipping — Q3 2008 Earnings Presentation
26 slides from Pacific Basin Shipping's earnings presentation, Oct 30, 2008
Slide 1: Pacific Basin Q308 Trading Update
Stock Code: 2343 Pacific Basin Q308 Trading Update As at 30 October 2008
Slide 2: What is Pacific Basin?
What is Pacific Basin? X Leading dry bulk shipping company principally operating in the Asia Pacific region X 30 offices worldwide, 500+ group staff, 2,200+ seafarers * X We carry the dry bulk commodities required for Asia’s growth X Diversifying in the roll on roll off shipping, ports and port serv
Slide 3: Q308 Highlight
Q308 Highlight X The dry bulk freight market has been greatly weakened by a combination of X slower growth of industrial production in China; X stalling trade volumes caused by tighter credit conditions globally; and X an increasing economic slowdown in the world’s developed economies Rates for both
Slide 4: Fleet Profile
Fleet Profile Fleet numbers as at 30 October 2008 Dry Bulk Fleet – 89 Total 150 ships Short Term Chartered - 27 Other Ships - 34 3 Handysize: 68 Handymax: 18 RoRo: 6 Tugs: 21 Newbuilding 1 Newbuildings 5 Newbuilding 1 Newbuilding 6 Chartered Chartered 14 15 Chartered Owned 16 44 Operating Lease Newb
Slide 5: Diversified Cargo
Diversified Cargo Total Handysize and Handymax Cargo Volume Mix Q1-Q3 2008 Log & Forest Products 6% Fertilisers 11% Grains 10% Steel & Scrap 9% 24.3 Cement 5% Other Bulks* 14% million tonnes Cement Clinker 4% Sugar 4% Alumina 3% Ore 11% Concentrates 6% Petcoke 5% Coal/Coke 7% Salt 5% 15% increase in
Slide 6: Market Information
Market Information The Baltic Dry Index (BDI) The Baltic Handysize Index (BHSI) 27 Oct 2008 27 Oct 2008 1048 US$ 5,830 $US /day (net) 12000 48,000 10000 8000 36,000 6000 24,000 4000 12,000 2000 0 0 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 US$/day (net) Dry Bulk 1 Year Ti
Slide 7: Earnings Coverage
Earnings Coverage Earnings coverage as at 27 October 2008 Handysize Handymax Revenue Day Revenue Day Unfixed 25,000 22,830 days 14% 21,750 days 8,000 Fixed 20,100 days 7% 20,000 22% 5,950 days^ 6,000 57% 4,870 days 15,000 US$31,340* 3,360 days^ 35% 4,000 US$45,070 94% 10,000 US$23,200 US$23,200 US$3
Slide 8: High Tonnage Demand
High Tonnage Demand Changes in Tonnage Demand % change from year before 13.0% We estimate tonnage 14 11.4% demand growth 10.7% 12 in 2008 will be 10 6.1% 7.5% lower compared 8 3.6% to previous forecast 6 4 2 In long term, 0 industrialisation of China, -2 India and other countries 2003 2004 2005 2006
Slide 9: Lower Orderbook in Handysize
Lower Orderbook in Handysize Type of Vessels Orderbook as % of Existing Fleet (dwt) Dry Bulk * 71% Significant Ave. Age orderbook Capesize 100K + slow down 110% 11.7 in Q308 Panamax 60-100K 53% 12.2 Handymax 35K-60K 15.4 61% Handysize 25,000- 34,999 47% 18.1 Source: Clarkson 1 Oct 2008 Note: * >10,0
Slide 10: Ageing Handysize Fleet
Ageing Handysize Fleet Total handysize 25,000- 34,999 dwt fleet as at 1 Oct 2008: 1,292 Vessels (38.0 mil dwt) Orderbook 25,000-34,999dwt Slippage in (47%) 20% all dry bulk 16.3% 16% 15.5% segments 12.4% 12% 30 yrs or 8% above 20% Uncertainty over 4% 2.6% 0-15 yrs actual deliveries 25 -29 yrs 44% 0%
Slide 11: Dry Bulk Carrier Sale & Purchase Market
Dry Bulk Carrier Sale & Purchase Market 2nd-hand 5 years old handysize vessel price (25K-30K dwt) Clarkson has stopped 3 Oct 08: publishing handysize US$ million US$ 44 mil (indeed any dry bulk 55 carrier) vessel values 50 45 40 ? Market turbulence 35 affect the second hand 30 vessel prices 25 20 No
Slide 12: Business Development
Business Development X 6 newbuildings will deliver in 2009 to 2011 including 2 purchase Roll on Roll off (RoRo) options X Good demand prospects, high average fleet age and low orderbook Fujairah Bulk Shipping X Strategy to be the market leader in sourcing and transporting aggregate in the Gulf regio
Slide 13: Outlook
Outlook X We are continuing to secure our earning coverage Handysize Handymax Year Cover US$/day * Cover US$/day 2008 93% 31,340 101% 45,070 2009 43% 22,580 107% 33,360 * Exclude any execution premium X As at 30 June 2008, we had US$192mil net cash, gross cash was US$804mil with an additional US$292
Slide 14: Disclaimer
Disclaimer This presentation contains certain forward looking statements with respect to the financial condition, results of operations and business of Pacific Basin and certain plans and objectives of the management of Pacific Basin. Such forward looking statements involve known and unknown risks,
Slide 15: Appendix – 2008 Financial Highlights
Appendix – 2008 Financial Highlights 1H08 1H07 TCE Earnings (US$m) 586.4 269.2 Reported net profit 337.6 162.9 Less: Vessel disposal gains (38.6) (50.2) Net profit before disposal gains 299.0 112.7 Basic EPS (HK¢) 162 81 Return on average shareholders’ equity 68% 63% Interim dividends (HK¢ per share
Slide 16: Results – Handysize Freight & Charter-hire
Appendix - Results – Handysize Freight & Charter-hire Drivers of the results 1H08 1H07 % Change FY07 Revenue days (days) 11,540 9,590 +20% 20,100 TCE earnings (US$/day) 32,460 19,750 +64% 23,200 Owned + chartered cost (US$/day) 12,840 9,370 +37% 10,240 Contribution (US$m) 226.4 99.5 +128% 260.5 More
Slide 17: Results – Handymax Freight & Charter-hire
Appendix - Results – Handymax Freight & Charter-hire Drivers of the results 1H08 1H07 % Change FY07 Revenue days (days) 2,900 2,260 +28% 4,870 TCE earnings (US$/day) 46,100 25,180 +83% 30,040 Owned + chartered cost (US$/day) 32,940 20,580 +60% 23,050 Contribution (US$m) 38.2 10.0 +282% 34.0 More cha
Slide 18: Daily Vessel Costs - Handysize
Appendix – Daily Vessel Costs - Handysize As at 1H08 Owned Chartered Opex US$/day Blended US$12,840 (FY2007: US$10,240) $16,230 Depreciation 630 Finance cost 15,000 Direct Overhead $12,850 Charter-hire 12,500 620 $9,330 Contracted 10,000 $8,640 Charter-hire 1,300 7,500 1,080 +28% 2008: US$15,650 1,7
Slide 19: Impact of Financial instruments
Appendix – Impact of Financial instruments Six months ended 30 June US$ million Realised Unrealised 2008 2007 Net Gains / (Losses) Interest rate swap contracts (0.2) (0.4) (0.6) 1.2 Bunker swap contracts 10.0 44.9 54.9 5.8 Forward freight agreements (10.4) (1.3) (11.7) (21.4) (0.6) 43.2 42.6 (14.4)
Slide 20: Appendix – Balance Sheet
Appendix – Balance Sheet 30 Jun 08 31 Dec 07 US$mil Net book value of fixed assets 1 898.6 755.9 Gross borrowings 612.3 660.2 Cash 804.3 649.5 Net cash / (borrowings) 192.0 (10.7) Shareholder's equity 1,333.2 867.6 Net cash (borrowings) / Fixed assets 21.1% (1.4)% Net cash (borrowings) / Shareholder
Slide 21: Capex and Combined Value by Vessel Types
Appendix – Capex and Combined Value by Vessel Types As at 4 Aug 08 Vessels Commitments A Combined View of Vessel Carrying Values and Commitments US$ mil Total US$721 mil US$ mil Total US$1,616 mil 350 312 1,000 929 300 8 165 800 250 97 196 577 200 600 163 18 283 150 23 400 667 507 68 129 100 50 29 2
Slide 22: Roll On Roll Off (RoRo)
Appendix – Roll On Roll Off (RoRo) X 6 newbuildings (3,600-3,800 lane metre) will deliver in 2009 to 2011 including 2 purchase options X Used for transportation of wheeled cargoes (mostly trucks) which are loaded over a ramp X Proven design, suitable for the common short sea trades 1,300-2,700LM, 1-
Slide 23: Attractive RoRo Sector
Appendix – Attractive RoRo Sector X Attractive fundamentals X Immediate “short-sea” trade demand is in Asia Minor & Europe, with Pacific Basin also well positioned to lead the way in the Asian RoRo sector X Low orderbook (<20%) X 42% of vessels aged 25 years or over Age Profile RoRo Fleet RoRo Order
Slide 24: Ports and Port Services
Appendix – Ports and Port Services Ports Infrastructure Unit X APMIG - Nanjing Longtan Tianyu Terminal (JV: 45% equity) X February 2008, formal operations commenced and in 1H08 handled over 0.6mil tonnes of cargo, mainly cement, fertilisers and chemicals X Further projects identified in the Yangtze
Slide 25: FBSL & Maritime Services
Appendix – FBSL & Maritime Services Fujairah Bulk Shipping X JV in Middle East for supplying rock and aggregates using tugs, barges and handysize ships from Fujairah to Qatar and Kuwait X 50:50 joint venture between Pacific Basin and the Government of Fujairah X Strong performance and further expans
Slide 26: Daily Vessel Costs – Handymax
Appendix – Daily Vessel Costs – Handymax As at 1H08 Owned Chartered Opex US$/day Blended US$32,940 (FY2007: US$23,050) $36,250 Depreciation 470 Finance cost 36,000 Direct Overhead Charter-hire 30,000 $25,460 24,000 710 18,000 24,750 35,780 12,000 9,370 $9,270 1,300 1,280 310 130 6,000 4,300 4,300 3,
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