Pacific Basin Shipping Limited · HKEX:2343
Pacific Basin Shipping — Q3 2024 Earnings Presentation
35 slides from Pacific Basin Shipping's earnings presentation, October 2024
Slide 1: 3Q 2024 Trading Update
3024 TRADING UPDATE “= TE OCTOBER 2024
Slide 2: Slide 2
Slide 3: Handysize and Supramax Market Spot Rates
Handysize Market Spot Rates (BHSI) Supramax Market Spot Rates (BSI) 38k dwt (tonnage adjusted^) 58k dwt US$/day net* US$/day net* 35,000 35,000 30,000 30,000 25,000 25,000 20,000 20,000 15,000 15,000 $13,300 FFA Average* FFA Average* $13,040 $11,390 $11,360 10,000 10,000 5,000 5,000 - - Jan Feb Mar
Slide 4: Dry bulk loadings and demand drivers
2016-2020 2021 2022 2023 2024 Mill tonnes 160 55 130 Millions Millions Millions 180 Millions 150 50 120 160 140 45 110 140 130 40 100 120 120 90 35 110 100 30 80 100 Apr Apr Aug Sep Oct Aug Sep Oct Mar Nov Dec May Mar Nov Dec May Jan Jun Jul Jan Jun Jul Feb Feb Aug Sep Oct Apr Nov Dec Mar Jan May Ju
Slide 5: Core Business TCE and cover
Handysize Core Business TCE US$/day 20,000 Reversal of Handysize freight tax provision Daily TCE earnings in 3Q 2024: of US$11.6 million resulted in TCE +US$1,690/day in 4Q23 ▪ Handysize: US$13,740, up 35% YoY 15,000 $13,740 # ▪ Supramax: US$12,220, up 6% YoY $12,530 $12,770 $12,570 $12,570 $11,050
Slide 6: Core Business Operating Activity
Core Business Operating Activity Handysize Performance vs Index (BHSI)* Supramax Performance vs Index (BSI)* Operating Activity Margin US$/day US$/day US$/day Scrubber contribution Scrubber contribution Margin Relative performance Relative performance 1,300 2,040 1,300 1,130 (480) 510 580 540 (1,600
Slide 7: Share Buyback Progress
▪ From 25 April to 31 December (both days inclusive) ▪ Any shares bought back by the Company will be cancelled ▪ Proactively repurchasing our own shares at a significant discount compared to the intrinsic value of our assets, we currently recognise it as a more advantageous strategy compared to acqu
Slide 8: Slide 8
Slide 9: Dry Bulk Trade Volume Forecasts
2024F Dry Bulk Trade Volumes YOY 2025F Dry Bulk Trade Volumes YOY We anticipate ongoing disruption to Suez Canal transit, impacting fleet efficiency and increasing Million Tonnes Coal 1,326 0.8% Million Tonnes Coal -1.3% 1,309 tonne-mile demand Iron Ore 1,590 3.0% Iron Ore -0.9% 1,576 ▪ Minor Bulk:
Slide 10: Dry Bulk Supply Development
Handysize / Supramax Supply Development Overall Dry Bulk Supply Development % of Total Fleet % of Total Fleet 5% ▪ Forecast dry bulk net fleet growth of 3.1% in 5% 2024 and 2.8% in 2025 4.2% 4.1% 4% 4% 3.6% ▪ Forecast total dry bulk fleet scrapping of 0.4% 3.2% 3.5% and 0.6% in 2024 and 2025 2.9% 3.
Slide 11: Orderbook and fleet age profile
Dwt m 14.4% of Handysize fleet is over 20YO 33% of existing ▪ Minor bulk fleet orderbook approximately 10.6% 12 fleet delivered 14.4% of the fleet is 20 years or older 10 8.7% of ▪ Handysize and Supramax ordering activities are down 61% 8 the fleet is and 11% respectively from January to September 2
Slide 12: Panama and Suez Canal transits
Bulkcarrier Panama Canal Transits (7-Day Moving Average) Suez Canal Transits (7-Day Moving Average) DWT m DWT m 0.7 2.5 14 Dec – near-miss incident involving a vessel resulting in pause of major liner vessels through Red Sea 0.6 2.0 0.5 1.5 0.4 Last 7 days vs 1st Week of Dec 23 61% 0.3 1.0 0.2 0.5 L
Slide 13: Slide 13
Slide 14: Fleet Strategy
Ultramax and Handysize Newbuild and 10-Year-Old Secondhand Vessel Values US$m 40.00 Ultramax Newbuild (61-64.5K) Fleet Strategy Ultramax Secondhand 10YO (61K ECO) 35.00 Handysize Newbuild (38-42K) 35.00 ▪ Renew our older and less-efficient Handysize vessels with younger, Handysize Secondhand 10YO (3
Slide 15: Maximising optionality
No. of Handysize Newbuilding No. of Ultramax Newbuilding No. of Handysize Newbuilding No. of Ultramax Newbuilding Delivered (no scrubber) (no scrubber) (50% share of scrubber benefits) (50% share of scrubber benefits) Maximising optionality ▪ Long-term inward charter of both Handysize and Supramax/U
Slide 16: Investor relations and disclaimer
▪ Annual and Interim Reports ▪ Quarterly Trading Updates ▪ Presentations and press releases on business activities ▪ Analysts Day & Investor Perception Study ▪ Sell-side conferences ▪ Investor/analyst calls and enquiries ▪ Corporate Information ▪ ESG and Risk Management ▪ Fleet Profile and Download
Slide 17: Slide 17
Slide 18: Growth in China Dry Bulk Seaborne Imports
Growth in China Dry Bulk Quarterly Seaborne Imports YoY YoY% Change +90% ▪ China’s fiscal stimulus is expected to support commodity demand +80% +77% ▪ Seaborne coal demand anticipated to remain robust due to energy security concerns, despite a rise in hydroelectric output in China +70% +64% ▪ In bot
Slide 19: Global macroeconomic outlook
2023 2024 5.2% 5.2% 2025 4.6% 5.0% 4.5% 2023 2024 2025 4.1% 2023 2024 2025 2023 2024 2025 3.2% 3.3% 3.2% 3.2% 3.2%3.3% 2.5% 2.5% 2.7% 2.6% 1.9% 1.9% 1.5% 1.5% 0.8% 0.9% 0.4% 0.5% Apr Jul Apr Jul Apr Jul Apr Jul Apr Jul Apr Jul Apr Jul Apr Jul Apr Jul Apr Jul Apr Jul Apr Jul 24 24 24 24 24 24 24 24 2
Slide 20: Long-term dry bulk demand drivers
▪ In July, IMF forecast global GDP growth of 3.2% and 3.3% in 2024 ▪ Significant global infrastructure spend required to drive development and 2025 respectively and “green transition” ▪ China’s fiscal stimulus is expected to support commodity demand ▪ Global population growth to increase demand for
Slide 21: Decarbonisation targets
Carbon Intensity (EEOI) Grams CO2 per tonne-mile 15 14.1 ▪ We target net zero emissions by 2050 10 PB targets -50% carbon intensity by 2030 on the ▪ We aim to reduce our EEOI carbon intensity by 50% by 2030 way to net zero by 2050 8.10 ▪ We target for our fleet to comprise only low-emission vessels
Slide 22: Vessels in Operation
113 Vessels 15 LT 128 154ST 282 Total Total owned Chartered Chartered Vessels in Operation Total Average Capacity Age Long-term Short-term Owned Chartered Sub-total Chartered1 Total (million dwt) Costs Owned Owned fluctuate with Substantially fixed costs market Handysize 61 12 73 59 132 2.1 13 Supra
Slide 23: Offices and trade routes
11 commercial offices 4 technical & crewing offices Our Hong Kong headquarters is home to executive management, commercial, technical, crewing and all central functions “Fronthaul” refers to shipping routes where there is high demand for vessels to transport commodities to areas where those commodit
Slide 24: Cargo mix
Minerals 11% Agricultural Products & Related 29% Salt 5% - 11% Grains & Agricultural Products 17% - Sand & Gypsum 5% +1pp Fertiliser 10% -1pp 10% Soda Ash 1% - 29% Sugar 2% -1pp 16% 14% 31% Energy 16% Coal 10% +2pp Petcoke 5% - Construction Materials 28% Wood Pellets 1% - 16% Cement & Cement Clinker
Slide 25: Fleet age and orderbook by size
8.7% 14 14% 0.4% (10,000–40,000 dwt) (40,000–70,000 dwt) 11.6% 12 11% 0.2% (70,000–100,000 dwt) 14.1% 12 13% 0.4% (100,000+ dwt) 7.4% 11 4% 0.1% 10.2% 12 9% 0.3% Source: Clarksons Research, data as at October 2024 ^ Data as at 11 October 2024
Slide 26: Emissions regulations impact on supply
Speed reduction Supply inefficiency Accelerate scrapping of older, less efficient vessels ▪ Technical design criteria ▪ First year of ratings ▪ Vessels maximum engine power has been ▪ 70% for 2025 capped ▪ First survey after 2023 ▪ Set to enter into force from Jan 2025 (completed by 2Q24) ▪ Shipping
Slide 27: Interim Results 2024
Interim Results 2024 P&L US$million 1H 2024 1H 2023 ▪ Generated an EBITDA of US$157.9 million, underlying profit EBITDA 157.9 189.1 of US$43.9 million and a net profit of US$57.6 million Underlying profit 43.9 76.2 respectively Net profit 57.6 85.3 Core Business Contribution ▪ Net borrowings of US$3
Slide 28: Interim Results: P&L
Interim Results 2024 US$million 1H24 1H23 Revenue 1,281.5 1,148.1 Owned vessel costs Voyage expenses (564.3) (506.7) 1H24 1H23 Opex (97.3) (103.6) Time-charter equivalent ("TCE") earnings 717.2 641.4 Depreciation (76.8) (73.9) Finance (3.3) (2.2) Owned vessel costs (177.4) (179.7) Chartered vessel c
Slide 29: Interim Results: Cash flow
Interim Results 2024 US$ Million 1 2 3 4 5 6 700 1▪ Operating cash inflow was US$103.3 million, inclusive of all +103 +8 long and short-term charter hire payments 600 -48 2▪ Proceeds from the sale of one Handysize vessel 549 537 -38 -14 -4 -1 -6 500 -12 ▪ US$47.8 million of which we paid US$25.2 mil
Slide 30: Interim Results: Balance sheet
Interim Results 2024 US$million 30 Jun 2024 31 Dec 2023 ▪ Debt repayments reduced net borrowings to US$32.2 million PP&E 1,755.8 1,796.7 ▪ As at 30 June 2024, we had 61 unmortgaged vessels Total assets 2,410.3 2,432.5 ▪ We prioritise the allocation of capital in the following order to maximise share
Slide 31: Handysize cash breakeven
Interim Results 2024 FY23 1H24 Indicative Owned Fleet Cash Breakeven before G&A Finance Cost US$/Day Depreciation Finance Cost Opex Cost US$4,620/day 20,000 Opex Cost US$120 US$4,500 18,000 16,000 14,000 12,510 ▪ Positive impact from normalisation of crew costs 12,150 after pandemic – particularly b
Slide 32: Supramax cash breakeven
Interim Results 2024 FY23 1H24 Indicative Owned Fleet Cash Breakeven before G&A Finance Cost US$/Day Depreciation Finance Cost Opex Cost US$5,120/day 20,000 Opex Cost US$210 US$4,910 18,150 18,000 17,370 16,000 14,000 ▪ Anticipate additional decreases in long-term 12,000 chartered vessel costs as hi
Slide 33: Cover for 2024 and 2025
Handysize Supramax US$/Day US$/Day ▪ We have covered 19% and 29% of our Handysize and $13,720 14,000 14,000 $13,290 $13,520* Supramax vessel days for the fourth quarter of 2024 at $12,590* US$10,170 and US$12,590 per day respectively 12,000 12,000 10,000 $9,470 $10,170* $9,750* 10,000 ▪ We have cove
Slide 34: Vessel days and chartered costs
Interim Results 2024 Handysize Supramax Handysize Supramax Jan-Sep Jan-Sep Year Vessel days Average cost (US$) Vessel days Average cost (US$) Days FY2023 2024 FY2023 2024 Core business revenue days 28,420 20,320 20,230 14,760 2H2024 2,230 12,130 430 13,940 – Owned revenue days 24,960 17,210 17,070 1
Slide 35: Scrubber benefits
▪ Scrubber investment was made prior to implementation of the IMO 2020 sulphur cap, which allows us to comply with the rules while using High-Sulphur Fuel Oil (“HSFO”) ▪ Savings achieved by using HSFO and benefitting from the spreads between HSFO and Low-Sulphur Fuel Oil (“LSFO”) are referred to scr
Pacific Basin Shipping — Q3 2024 Earnings Presentation on 6ix