Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping Company — Investor Presentation (April 2005)
42 slides from Great Eastern Shipping's investor presentation, Apr 29, 2005
Slide 1: Business & Financial Presentation FY 2004-05
The Great Eastern Shipping Company Ltd. Business & Financial Presentation FY 2004-05 April 29, 2005 1
Slide 2: Forward Looking Statements
Forward Looking Statements Except for historical information, the statements made in this presentation constitute forward looking statements. These include statements regarding the intent, belief or current expectations of GE Shipping and its management regarding the Company’s operations, strategic
Slide 3: A year of record performance
A year of record performance Total income of Rs. 2119 cr.up by 48% PAT at Rs. 809 cr. up by 72% EPS of Rs.42.34 (PY Rs.24.29) Highest ever equity dividend payout of Rs. 194.24 crores ( includes tax) Committed capex as on date - USD 399 mn towards 16 vessels 3
Slide 4: Financial Comparison (Year on Year)
Financial Comparison Year on Year (in Rs. Cr.) FY 2004-05 FY 2003-04 Total Income 2119 1426 EBIDTA 1159 740 Interest 83 47 Depreciation 285 201 PBT 791 492 PAT* 809 471 * includes prior period adjustments 4
Slide 5: Financial Comparison (Quarter on Quarter)
Financial Comparison Quarter on Quarter (in Rs. Cr.) Q4 Q4 FY 2004-05 FY 2003-04 Total Income 571 479 EBIDTA 313 265 Interest 22 15 Depreciation 74 60 PBT 217 190 PAT* 252 185 * includes prior period adjustments 5
Slide 6: Balance Sheet Comparison
Balance Sheet Comparison (in Rs. Cr.) FY 2004-05 FY 2003-04 Company Owned: Asset (incld. Vessels under Construction) 3201 2552 Total Assets 4269 3156 Company Owed: Shareholder’s Funds 2189 1497 Debt 2080 1534 Deferred Taxation - 125 Debt Equity Ratio 0.95 1.03 Net Debt Equity Ratio 0.47 0.61 6
Slide 7: Delivering through the years ..
Delivering through the years .. 7
Slide 8: Book value, NAV and ROE per share
300 282 50 43.8 45 250 40 34.8 200 35 Rs. per share 30 % 150 139 25 19.5 115 15.96 17.48 20 100 84 79 15 67 67 62 50 53 10 50 5 0 0 2000-01 2001-02 2002-03 2003-04 2004-05 BV NAV ROE% - 8
Slide 9: Growing bigger … … . & stronger
Growing bigger … … . & stronger FY 1999-00 ? Capital Employed Rs. 2112 cr. ? Net worth Rs. 1107 cr. ? Net Debt Equity Ratio 0.78 Cash outflows between FY 2000-01 to FY 2004-05 ? to shareholders Rs. 785 cr. ? spent on Capex Rs. 3050 cr. FY 2004-05 ? Capital Employed Rs. 4269 cr. ? Net worth Rs. 2189
Slide 10: Offshore Oil Field Services
Offshore Oil Field Services 10
Slide 11: The Market-CY 2004
The Market-CY 2004 Demand for rigs rose : ? Worldwide by around 6% ? In India by around 9% Utilisation and day rates improved ? Rig utilisation by around 5% ? PSV utilisation by around 4% India, Mexico, Russia, and West African countries initiated plans for oil security Of the 20 blocks offered unde
Slide 12: Global Rig Demand
Global Rig Demand 470 468 465 460 Rigs 455 Number of 450 445 442 440 435 430 2003 2004 12 Source: RS Platou
Slide 13: Charter hired Rigs in India
Charter hired Rigs in India* 27 25 25 23 23 Number of Rigs 21 19 19 17 15 2002 2003 2004 * Excludes ONGC owned rigs 13
Slide 14: Rig Utilisations and day rates on the rise
Rig Utilisations and day rates on the rise Rig Utilisation (On Total Supply) 85% 84% 84% 83% 82% 81% 80% 79% 79% 78% 77% 76% 2003 2004 Day Rates, 300 ft IC Jack Up in US Gulf (USD 1000) 60 50 50 40 34 30 20 10 0 2003 2004 14 Source: RS Platou,
Slide 15: Increase in PSV Utilisations and day rates
Increase in PSV Utilisations and day rates N Sea PSV utilisation 86% 84% 84% 82% 80% 79% 78% 76% 2003 2004 N Sea Pool PSV day rates (GBP/ day) 7000 6884 6000 5018 5000 4000 2003 2004 15 Source: Seabroker
Slide 16: Overview of the year - 2004-05
Overview of the year - 2004-05 Enhanced the OSV fleet - deep water capability Ordered new building – 2 AHTSVs and 2 PSVs Increased operational presence in North Sea / Middle East with major international operators 3 yr contract for Kedarnath renewed at higher rates commencing October 2005 16
Slide 17: Market Outlook CY 2005
Market Outlook CY 2005 Increased pressure to explore and produce oil ? World oil estimates 6% increase in offshore drilling activities Budgetary allocations of oil companies reconsidered ? Thrust on reserve accretion Marine construction market to absorb more vessels ? Increased activities envisaged
Slide 18: Offshore Wells Drilled Globally
Offshore Wells Drilled Globally 3250 3200 3228 3150 3100 Number of wells 3050 3046 3000 2950 2963 2900 2850 2800 2003 2004 2005 E 18 Source: World Oil
Slide 19: Addressing Business Concerns
Addressing Business Concerns Restricted marketability of older assets ? Adapting to clients specific requirements through upgradation ? Building an OSV fleet through NB orders - 4 New Buildings to join the fleet during the year Increasing competition from foreign flags ? Diversifying risk by increas
Slide 20: The Emerging Scenario !
The Emerging Scenario ! International Market High oil & gas prices and reducing large opportunities resulting in increasing pressures on oil companies to explore & produce Major increase in oil co. spending underway. In 2005, initial indications of 8-10% growth Strength in rigs market to continue th
Slide 21: Revenue Visibility: FY 2005-06
Revenue Visibility: FY 2005-06 Dry Docking Drilling Units @ Offshore Support Vessels Rs. 87 Cr Open Covered 27% 55% 45% Rs.125 Cr Covered 73% Harbour Tugs Marine Construction Open Rs. 29 Cr Open Rs. 6 Cr 36% Covered 86% Covered 64% 14% Revenue of Rs 292* cr. covers OPEX by 1.2 x @Inchartered by Deep
Slide 22: Oil fuels growth
Depleting reserves High Oil Prices Oil fuels growth leading to higher E&P activities 22
Slide 23: Shipping
Shipping 23
Slide 24: 2004-05: The year of the ship owner
2004-05: The year of the ship owner Tanker Drybulk BDTI was up by 26 % BHMI was up by 32 % Second hand values gained 35% Second hand values gained 45 % NB price Index up by 32 % NB prices up by 32% Container Earnings were up by 52% 10 yr second hand values 57% NB prices up by 26% 24 Source: Clarkson
Slide 25: Tanker earnings
Tanker earnings (Average for each year) 90,000 80,000 70,000 60,000 USD / day 50,000 40,000 30,000 20,000 10,000 0 FY01 FY02 FY03 FY04 FY05 VLLC 1990-91 Suezmax 1990-91 Aframax 1900-91 MR Product 25 Source: Clarkson Research
Slide 26: Record Second Hand Asset Values
Record Second Hand Asset Values ( for 5 year old tankers) 115 95 USD mn. 75 55 35 15 FY01 FY02 FY03 FY04 FY05 VLCC Suezmax Aframax 45K MR Product 26 Source: Clarkson Research
Slide 27: Record New Building Prices
Record New Building Prices 140 120 100 USD mn. 80 60 40 20 FY01 FY02 FY03 FY04 FY05 VLCC Suezmax Aframax 47K MR Product 27 Source: Clarkson Research
Slide 28: Average Dry bulk earnings (Handymax)
Average Dry bulk earnings (Handymax) 30,000 25,000 20,000 USD/ day 15,000 10,000 5,000 0 FY01 FY02 FY03 FY04 FY05 Handymax Av Trip Earnings 28 Source: Clarkson Research
Slide 29: Record Second Hand Values
Record Second Hand Values ( 5 year old 45K Handymax) 40 35 30 USD mn 25 20 15 10 FY01 FY02 FY03 FY04 FY05 Handymax 29 Source: Clarkson Research
Slide 30: Record New Building Handymax Prices
Record New Building Handymax Prices 40 35 30 USD mn 25 20 15 FY01 FY02 FY03 FY04 FY05 Handymax 30 Source: Clarkson Research
Slide 31: VLCC AG_Japan WS rates Jan2002 onwards
VLCC AG_Japan WS rates Jan2002 onwards (Monthly High Lows) 400 350 300 250 200 150 100 50 0 Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 31
Slide 32: BHMI Jan 2002 onwards
10000 15000 20000 25000 30000 35000 40000 5000 0 Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02 Jul-02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 32 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Jan-04 (Monthly High Lows) Feb-04 Mar-04 Apr-04 May-04 Jun-04 Jul-04 BHMI Jan 20
Slide 33: Overview of the year - 2004-05
Overview of the year - 2004-05 Tonnage crossed 3 Mn dwt mark (growth of 22%) Capex committed / spent USD 291 mn Contracted 3 NB - MR Product tankers and acquired 3 second hand tankers Contracted 3 modern Handymax dry bulk carriers Enhanced inchartering exposure Time Charters renewed at higher rates
Slide 34: Market Outlook CY 2005
Market Outlook CY 2005 Tankers: ? Oil demand growth above 5 year averages but below last year ? 4% growth in tonne mile demand expected ? Expected deliveries - 30 mn dwt; Net fleet growth of 6 -7% ? Quantum of scrapping important ? Healthy spot rates expected ? Asset values to remain firm 34
Slide 35: Growth Rate in Oil demand
Growth Rate in Oil demand 3.5% 3.4% 2.8% 2.5% 2.4% 2.3% 2.1% 2.1% 5 year average 1.8% 1.4% 1.4% 1.1% 0.8% 0.7% 2000 2001 2002 2003 2004 2005E IEA OPEC DoE 35
Slide 36: Market Outlook CY 2005
Market Outlook CY 2005 Dry Bulk: ? China to drive trade ? 6 % growth in tonne-mile demand expected ? Expected deliveries - 20 mn dwt; Net fleet growth of 7% ? Scrapping to remain minimal ? Healthy spot rates envisaged ? Asset values to remain firm 36
Slide 37: China's share in incremental Iron ore trade
China’s share in incremental Iron ore trade 80 70 68 60 60 56 52 50 (M Tons.) 40 37 38 30 20 10 0 2003 2004 2005 E China World 37
Slide 38: Potential Risks & Upsides
Potential Risks & Upsides TANKERS RISKS ? Slower than anticipated growth in oil demand ? Low scrapping UPSIDES ? Disruption in supply ? Harsh winter ? Decline in production in consuming areas DRY BULK RISKS ? Slowdown in steel sector particularly China UPSIDES ? China surprises yet again ? Port cong
Slide 39: Revenue Visibility: FY 2005-06
Revenue Visibility: FY 2005-06 Crude Tankers Product Tankers Open Open Rs.222 cr Rs. 387 cr 53% 30% Covered 47% Covered 70% Drybulk Carriers Covered Open 22% 78% Rs. 96 cr Revenue of Rs.705 cr covers OPEX by 1.4x 39
Slide 40: Business Philosophy
Business Philosophy Growth at the “right” price ? Lower break evens enabling sustenance through downturns with strong upside potential Managing risks ? Blend of Spot & Period covers Build capacity through operating leverage 40
Slide 41: Timing acquisitions and orders
Timing acquisitions and orders GES Tanker Purchases in last 5 FYs (Basis Commitment in FY) Clarksons Second Hand Tanker Price GES Purchase Points 19% 12% 11% 31% 27% 700 (2) 600 (2) 500 (3) (2) (2) (2) (2) 400 300 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 41
Slide 42: Thank You
Thank You Visit us at: www.greatship.com 42
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