Himalaya Shipping Ltd. · OSL:HSHP
Himalaya Shipping — Investor Presentation (May 2022)
16 slides from Himalaya Shipping's investor presentation, May 2022
Slide 1: Taking the next step on shipping's path to zero emissions, with high profitability
Taking the next step on shipping’s path to zero emissions, with high profitability Company Presentation HIMALAYA-SHIPPING.COM 1
Slide 2: Disclaimer
Disclaimer This presentation (the "Presentation") has been prepared by Himalaya Shipping Ltd. (the "Company") solely for information purposes. The Presentation does not constitute any recommendation to buy, sell or otherwise transact with any securities issued by the Company. No representation, warr
Slide 3: Himalaya Shipping - project overview
Himalaya Shipping - project overview Ship Price1 (USDm) Yard Size (DWTk) Ship type Target delivery date Mount Kilimanjaro 67.8 NTS 208 Dual fuel Newcastlemax Mar-23 Mount Ita 67.8 NTS 208 Dual fuel Newcastlemax Mar-23 Mount Etna 67.8 NTS 208 Dual fuel Newcastlemax Apr-23 Mount Blanc 67.8 NTS 208 Dua
Slide 4: Why are we ordering bulkers? (I/IV)
Why are we ordering bulkers? (I/IV) Capesize orderbook as % of fleet Order book / Fleet 120% 118% 110% 100% 90% 80% 70% 60% 50% 40% 30% 8% 6,3% 20% 10% 0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Orderbook at 30
Slide 5: This cycle might last longer than you think
This cycle might last longer than you think A lot of ships meeting age limit Significant fleet replacement needed 300 # ships scrapped pr year # ships scrapped pr year Year Scrapping candidates until 2030 (if scrapped @ 20 years) (if scrapped @ 15 years) 2022 57 287 250 2023 28 45 200 2024 41 110 20
Slide 6: Why are we ordering bulkers? (IIII/IIII)
Why are we ordering bulkers? (IIII/IIII) Shipyard capacity down - 166 shipyards closed in China Banks exiting Anhui Hengshun Fangzhou Nantong Jinghua Tianjin Xingang Shipyard Anhui Ma'anshan Nantong Lianxinggang Shipbuilding Co Ltd - Qidong Universe Shipbuilding (Yangzhou) Bohai ( as above now just
Slide 7: Upcoming regulations will have large impact
Why are we ordering bulkers? (II/IV) Upcoming regulations will have large impact Current Capesize fleet will struggle with CII towards 2030 • IMO greenhouse gas strategy is to reduce carbon intensity by 40% in 2030 vs 2008. 80% 70% • The strategy is operationalized through the EEXI and CII policy me
Slide 8: Why are we ordering bulkers? (III/IV)
Why are we ordering bulkers? (III/IV) Large part of the fleet non-compliant with new regulation Even 2014 built bulkers face EEXI compliance issues2 • Ships >5000 tdw MUST comply with relevant EEXI standards at first class survey EEXI rating due in 2023 i.e. annual, intermediate or renewal survey to
Slide 9: Why are we ordering bulkers? (IV/IV)
Why are we ordering bulkers? (IV/IV) Superior environmental performance compared to existing fleet – top CII rating will give significant competitive advantage E D CII Himalaya 100% of C 30% 70% 2019 CII average Capesize fleet B A 2019 2023 2024 2025 2026 2030 • Himalaya Shipping’s fleet is estimate
Slide 10: The green twist – the ships save CO2 equal to 40,000 cars
The green twist – the 12 ships save CO2 equal to 40,000 cars - Around half of Norway’s EV sales pr year Significantly lower CO2 emissions Significantly lower NOx emissions Significantly lower SOx emissions kT of CO2/year T pr year T pr year 40% reduction in CO2 99% reduction in NOX 99% reduction in
Slide 11: Greenhouse Gas emission reduction from burning LNG
Greenhouse Gas emission reduction from burning LNG Methane slip a diminishing issue Realizing the reduction potential of LNG • Methane slip, i.e., unburned methane from the engines, has been a hot topic due to • Record-low methane slip makes it possible to realize significant GHG savings from methan
Slide 12: Why are we ordering bulkers with LNG DF?
Why are we ordering bulkers with LNG DF? LNG fuel is a viable alternative to speed reduction… … but supply of LNG fueled ships will remain limited2 • The CII-threshold values will tighten gradually to an expected required CII-improvement • The number of LNG capable Capesize vessels in operation stan
Slide 13: Long-term prices support fuel benefit
Long-term prices support fuel benefit Long-term LNG prices are lower than Oil Consumption is lower - significant savings1 $/MT LNG $/day VLSFO $/day 1 600 1 400 19 101 18 201 17 605 17 294 17 128 1 200 15 002 1 000 12 564 $/day 11 440 800 600 400 200 2024 2025 2026 2027 0 Incremental cost Saving of
Slide 14: Why the Himalaya ships deserve a premium
Why the Himalaya ships deserve a premium Running on LNG @ $9/mmbtu – 80% premium to BCI index (Ballast) Running on LSFO – 52% premium to BCI index (Ballast) $/day $/day 27 MT/d @ $507/t ($9/mmmbtu) vs 43 MT/d @ $760/t when sailing 33 MT/d @ $760/t vs 43 MT/d @ $760/t when sailing Cargo capacity Carg
Slide 15: Significant cash-flow
Significant cash-flow High sensitivity to an improving market Illustrative dividend pr share (in $) and yield (%) based on different rate assumptions $24.8/share – 442% Previous peak $3.6/share – 64% $3.7/share – 66% $1.9/share – 35% $0.4/share – 7% 2020 average - $15,400/day 2023 FFA - $23,500/day
Slide 16: Significant value upside
Significant value upside High sensitivity to increasing asset prices Illustrative NAV pr share (in $) based on different value pr ship assumptions $32.5/share Previous peak Order made Jan-22 Chinese quotes 2024 delivery1 2025 delivery Current implied $10.1/share $8.2/share $5.5/share 75,5 83,0 88,0