Pacific Basin Shipping Limited · HKEX:2343
Pacific Basin Shipping — RBS China-India Access Conference 2011
32 slides from Pacific Basin Shipping's conference presentation, May 30, 2011
Slide 1: 1Q11 Trading Update
RBS China-India Access Conference London, June 2011 Pacific Basin 1Q11 Trading Update 30 May 2011 1
Slide 2: Pacific Basin Overview
Pacific Basin Overview One of the world’s leading dry bulk owners & operators of modern handysize and handymax vessels Flexible Pacific Basin dry bulk business model Large scale fleet of uniform, interchangeable modern vessels Mix of owned, long-term and short-term chartered ships Diversif
Slide 3: 2011 First Quarter Highlights
2011 First Quarter Highlights Pacific Basin Dry Bulk Handysize and handymax freight rates have increased 28% and 30% since early February on healthy South American grain exports and minor bulk trades Capesize rates dropped in January and remained below handysize and handymax rates over most of t
Slide 4: Differentiated from BDI & Traditional Ship Owning
Differentiated from BDI & Traditional Ship Owning Fleet Smaller bulk carrier segment Modern, large scale & interchangeable ships benefits from: Ability to change market exposure through charter Handysize orderbook activity smaller than ship capacity Higher utilisation and earnings ability throu
Slide 5: Dry Bulk Market Information
Dry Bulk Market Information Capesize (BCI) versus Handysize (BHSI) & Handymax (BSI) Spot Rate Spot Earnings Correlation between US$/day (net) Handysize / Handymax and Capesize $18,000 27May2011 $16,000 BHSI BSI 92% - 97% BSI $14,000 US$14,411 100% $12,000 BHSI 80% US$10,979 $10,000 60% $8,000 BCI 42
Slide 6: Chinese Dry Bulk Trade
Chinese Dry Bulk Trade Chinese Dry Bulk Trade Volume Utilisation of the dry bulk fleet m tonnes m tonnes Ratio 1200 3,295 28% 3,500 8.5 26% 2,965 900 3,000 8.0 2,500 600 7.5 14% 1018 2,000 11% 957 1,500 7.0 300 8% 8% 1,000 6.8 6.5 500 6.7 0 0 6.0 -129 -159 01 02 03 04 05 06 07 08 09 10 -300 2005 200
Slide 7: Strong Minor Bulk & Coal Demand from China
Strong Minor Bulk & Coal Demand from China China Soya Bean Import China Imports of Forest Products China Imports of Copper Concentrates m tonnes m tonnes m tonnes 60 +29% 54.8 30 +19% 28.2 23.7 3.5 3.2 -6% 50 42.6 25 3.0 3.0 40 20 2.5 30 15 2.0 20 10 1.5 1.0 10 5 0.5 0 0 0 2006 2007 2008 2009 2010 2
Slide 8: Dry Bulk Demand
Dry Bulk Demand Dry Bulk Fleet Effective Demand % change YOY % Change 24.2 25 YOY 15 13.0 13.8 20 14.4 14.0 12 15 10.7 9.4 9 10 5.6 7.9 7.5 6.7 5 6 6.1 0 3 4.3 3.8 -0.3 1.4 -5 0 -5.9 -10 -8.3 -3 -10.5 2005 2006 2007 2008 2009 2010 -15 Q1 Q2 Q3 Q4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2008 2009 2010 2011E China
Slide 9: Dry Bulk Fleet Changes
Dry Bulk Fleet Changes Dry Bulk Fleet Development m Dwt 16.8% Dry bulk capacity overall expanded by 3% net 100 driven by the new delivery of 19.7m in 1Q11 80 9.9% 4.4 15.7% Handysize expanded by 2% net in 1Q11 60 9.0 40 79.8 Approx. 51% delivery shortfall in first 3 months 43.3 0.7 20 against
Slide 10: Dry Bulk Orderbook
Dry Bulk Orderbook Handysize Scheduled Orderbook m Dwt 645 vessels (22m dwt) - 35% 137 m dwt* of new dry bulk capacity scheduled to 15 18% deliver this year (2010: 126m) 17.7% 12 We expect 40% of slippage in 2011, net deliveries 13% 9 8.7% before scrapping in 2011 will be around 15% 6 Minor bu
Slide 11: Pacific Basin Dry Bulk Earnings Coverage
Pacific Basin Dry Bulk Earnings Coverage Solid coverage: no cargo counterparty defaults 4% of Handysize revenue days chartered in on an index-linked basis 2012 coverage: Handysize – 30%; Handymax – 139%; Combined – 38% as at 11 Apr 2011 Pacific Basin Dry Bulk Fleet: 146 2011 Total Combined Cov
Slide 12: Dry Bulk Outlook
Dry Bulk Outlook Positive Factors Negative Factors China’s continued dependence on Continued excessive newbuilding imported minor bulks from further afield deliveries Strong growth in developing countries Dry bulk demand stifled by shortfall increased steel & raw materials demand in mining c
Slide 13: PB Energy & Infrastructure Services
PB Energy & Infrastructure Services US$m Towage Fleet: 42 vessels Offshore/project supply & harbour towage services (“Towage”) 1.0 (as at 25 Feb 2011) PacMarine Services 1.0 2 Chartered Tugs Fujairah Bulk Shipping (“FBSL”) 2.9 7 Barges Segment net profit in 2010 (2009: US$8.2m) 4.9 32 Owned Tugs 1 B
Slide 14: Energy & Infrastructure – Outlook
Energy & Infrastructure – Outlook Positive Factors Negative Factors Increasing oil and energy prices are Slow resumption of infrastructure and leading to more offshore projects and offshore projects in the Middle East related infrastructure development Some further delays to new project activi
Slide 15: PB RoRo
PB RoRo Net loss in 2010: -US$1.1m (2009: Profit US$0.1m) World RoRo Fleet 438 Vessels Slow export-led recovery in European (862,453 Lane Metres) economy remains fragile Charter demand for RoRo vessels is still very weak and well below what we had expected a 30+ Year 29% year ago 0-14 Year 44%
Slide 16: RoRo – Outlook
RoRo – Outlook Positive Factors Negative Factors Global and especially European economic Significant number of large RoRo recovery expected to support modest newbuilding scheduled to deliver in 2011 growth in trailer volumes and short-sea Excess capacity and reluctant to charter RoRo trades ne
Slide 17: 2010 Financial Highlights
2010 Financial Highlights As at 31 December 2010 2010 2009 Segment net profit 146.3 141.9 Treasury (18.5) (13.8) Non direct G&A (8.0) (12.3) Underlying profit 119.8 115.8 Unrealised derivative expenses (12.4) (4.5) Impairment of Fujairah Bulk Shipping (19.1) - Gain from partial sale of shares in Gre
Slide 18: Daily Vessel Costs - Handysize
Daily Vessel Costs - Handysize Year ended 31 Dec 2010 Owned Chartered US$/day Blended US$11,970 (2009: US$9,690) Opex Charter-hire days & rates Depreciation 2011-2013 Finance cost 14,700 Direct overhead 500 $11,570 $11,480 $11,650 Charter-hire 10,380 8,770 480 5,390 days 8,690 14,200 1,040 4,030 day
Slide 19: Balance Sheet
Balance Sheet As at 31 Dec 2010 PB PB PB US$m Dry Bulk EIS RoRo Treasury 31 Dec 10 31 Dec 09 Vessels & other fixed assets 829 224 429 - 1,519 998 Total assets 979 291 444 680 2,555 2,470 Long term borrowings 185 45 55 575 860 877 Total liabilities 288 62 59 576 1,011 1,014 Net assets 691 229 385 104
Slide 20: Borrowings and Capex
Borrowings and Capex As at 31 Dec 2010 + Funded from US$703m cash, Authorised commitments new borrowings, and US$m future operating cashflows 250 230 Redeemable in Apr 2014 200 159 150 120 125 105 111 100 61 69 50 44 43 44 37 21 26 16 17 18 20 20 10 8 0 2011 2012 2013 2014 2015 2016 2017 2018-2021 V
Slide 21: Capex and Combined Value by Vessel Types
Capex and Combined Value by Vessel Types As at 31 Dec 2010 + Authorised commitments Vessels Commitments A Combined View of (including authorised commitments) Vessel Carrying Values and Commitments US$m Total US$411m US$m Total US$1,925m 180 159 1,226 150 364 120 120 87 111 25 122 90 3 78 60 476 22 4
Slide 22: Cashflow
Cashflow Year ended 31 Dec 2010 US$m 2010 2009 Operating cash inflows 199 145 Investing cash out / inflows (462) (178) - Vessels & other fixed assets related payments (541) (298) - Sales of vessels - 105 - Jointly controlled entities related payments and receipts (10) 45 - Disposal of part of our ho
Slide 23: Outlook
Outlook We anticipate the dry bulk market will be weaker than 2010 We expect minor bulk trades to support an improved second quarter, with near term demand recovery overshadowed by continued newbuilding deliveries Our dry bulk market view remains unchanged since our 2010 Annual Results Announc
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: Pacific Basin Dry Bulk - Diversified Cargo
Appendix: Pacific Basin Dry Bulk - Diversified Cargo Pacific Basin Dry Bulk Cargo Volume Q1 2011 Alumina 8% (+2%) Coal / Coke 3% (-6%) Soda Ash 1% (+1%) Concentrates 6% (-5%) Other Bulks 10% (+4%) 7.0 Fertilisers 7% (0%) Cement & Million Cement Clinker 8% (+2%) Tonnes Logs & Forest Products 17% (+6%
Slide 26: China at late-Industrialisation Stage
Appendix: China at late-Industrialisation Stage Steel Consumption Per Capita China (from 1990) China growth matches Tons per Capita Japan (from 1950) 1.0 Korea (from 1970) historical trend in India (from 2005) 0.9 Japan and Korea 0.8 Suggests strong 0.7 growth in dry bulk 0.6 0.5 segment to rema
Slide 27: Chinese Iron Ore Demand
Appendix: Chinese Iron Ore Demand m tonnes China Iron Ore Sourcing for Steel Production 11% 1,100 2004-2010 CAGR for Iron ore import: 17% 1,002 900 906 700 628 619 -1% Slow down of Chinese iron ore 500 import mainly due to the Chinese 383 300 278 energy conservation policy 100 2004 2005 2006 2007 20
Slide 28: Pacific Basin Dry Bulk – Handysize
Appendix: Pacific Basin Dry Bulk – Handysize As at 31 December 2010 1H10 2H10 2010 2009 Change Revenue days (days) 13,940 15,130 29,070 26,100 +11% TCE earnings (US$/day) 16,840 16,670 16,750 14,500 +16% Owned + chartered cost (US$/day) 11,750 12,170 11,970 9,690 +24% Segment net profits (US$m) 69.7
Slide 29: Pacific Basin Dry Bulk – Handymax
Appendix: Pacific Basin Dry Bulk – Handymax As at 31 December 2010 1H10 2H10 2010 2009 Change Revenue days (days) 5,570 5,880 11,450 10,640 +8% TCE earnings (US$/day) 23,680 21,520 22,570 19,490 +16% Owned + chartered cost (US$/day) 22,050 21,350 21,690 18,120 +20% Segment net profits (US$m) 8.8 - 8
Slide 30: PB Energy & Infrastructure Services PB RoRo
Appendix: PB Energy & Infrastructure Services PB RoRo As at 31 Dec 2010 2010 2009 PB Energy & Infrastructure Services Offshore and project supply and harbour towage services (“Towage”) 1.0 1.0 PacMarine Services 1.0 0.9 Fujairah Bulk Shipping (“FBSL”) 2.9 6.3 Segment net profit 4.9 8.2 PB RoRo segme
Slide 31: Impact of Financial Instruments
Appendix: Impact of Financial Instruments US$m Realised Unrealised 2010 2009 Net Gains / (Losses) Forward freight agreements (3.4) (3.4) (6.8) (25.7) Bunker swap contracts 6.0 (8.2) (2.2) 45.7 Interest rate swap contracts (5.5) (0.8) (6.3) 1.2 (2.9) (12.4) (15.3) 18.8 Cash settlement of contracts
Slide 32: 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$7.98 and HK$
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