Pacific Basin Shipping Limited · HKEX:2343
Pacific Basin Shipping — Q1 2016 Earnings Presentation
33 slides from Pacific Basin Shipping's earnings presentation, Apr 6, 2016
Slide 1: 2016 First Quarter Trading Update
2 Pacific Basin 2016 First Quarter Trading Update 6 April 2016 Navigating with resilience
Slide 2: 2016 First Quarter Trading Update
2016 First Quarter Trading Update Our business model enabled us to outperform spot market indices in 1Q: FY2016 Cover Q1 Q1 Average Daily Earnings US$/day US$/day Outperformance PB Update Handysize TCE 55% @ $7,100 $5,900 +83% Supramax TCE 71% @ $6,800 $5,800 +61% We have not taken any long-term
Slide 3: Our Ability to Outperform
Our Ability to Outperform Our TCE Outperformance Compared to Market Our business model has been built up and refined over many Baltic Handysize Index - net rate years. Through a combination of the following factors, we are able PB Handysize Performance to generate a premium over market rates due to
Slide 4: Earnings Cover for 2016
Earnings Cover for 2016 Contracted Revenue Days Handysize Supramax 41,910 days 38,220 days 15,530 days 13,790 days 2Q-4Q 2Q-4Q 26,270 8,790 FY16 days days 46% FY16 48% 55% $9,500 $9,500 34% 53% 71% $8,200 $7,100 $8,600 $10,100 $6,800 13,770 100% 1Q 100% 1Q 100% days $8,100 100% 5,270 100% 6,740 $8,8
Slide 5: 2015 Balance Sheet & Liquidity
As in Annual Report 2015 Balance Sheet & Liquidity 31 December 2015 US$m 2015 2014 Cash Position 358 363 Committed but undrawn loan facilities 375 Remaining Newbuilding Capital Commitments 274 Net Borrowings 568 Vessels & Other Fixed Assets 1,611 Net Gearing 35% 40% New US$125million convertible b
Slide 6: Dry Bulk Spot Market at 30 Year Lows
Dry Bulk Spot Market at 30 Year Lows Baltic Handysize Index (BHSI) & Baltic Supramax Index (BSI) US$/day (net) * US$/day (net)* $10,000 BSI $5,000 31 Mar 2016: $8,000 $4,500 BSI: $4,730 $6,000 $4,000 BHSI $4,000 BHSI: $3,500 $3,830 $2,000 BHSI: $2,563 $3,000 $0 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 $2,
Slide 7: Handysize Vessel Values
Handysize Vessel Values US$ Million 55 50 45 40 35 30 25 Mar 2016 Newbuilding (35,000 dwt): 25 US$20m 20 15 10 5 years (32,000 dwt): US$9.5m 5 04 05 06 07 08 09 10 11 12 13 14 15 16 All time high gap between newbuilding and secondhand values Discourages new ship ordering which was negligible in
Slide 8: Dry Bulk Seaborne Trade in 2015
As in Annual Report Dry Bulk Seaborne Trade in 2015 (Volume) Million Tonnes YOY Change Iron Ore 1,367 Coal 1,149 -5% 2% Sub major bulk total 2,516 -1% Bauxite / Alumina 122 16% Soybean 127 9% Copper Concentrates 26 8% Steel Products 322 5% Sugar 56 4% Fertiliser 120 4% PB Focus Agribulks 162 3% Fore
Slide 9: Chinese Seaborne Dry Bulk Imports 2015
As in Annual Report Chinese Seaborne Dry Bulk Imports 2015 (Volume) Million Tonnes YOY Change Iron Ore 940 3% Coal 188 -30% Sub Major Bulk Total 1128 -5% Other Coarse Grains 22 91% Maize 5 84% Fertiliser 21 19% PB Focus Soybeans 81 14% Agribulks 15 12% Metals 142 7% Wheat 3 5% Minerals 34 -8% Forest
Slide 10: Self Correcting Supply Factors
Self Correcting Supply Factors New Vessel Ordering is Down Per Quarter annualised in % of fleet (dwt) Number of Delivery 25% 24% Chinese yards Slippage delivering 20% Handy bulk 15% vessels decreased Orderbook from 54 in 2012 Cancellations & 10% 11% to 23 in 2015 Conversions 5% Feb 16 0.1% 0.7% Flee
Slide 11: Dry Bulk Supply & Demand
Dry Bulk Supply & Demand % Supply: 16.0 1Q16 net fleet growth: 2.1% 14.0 New deliveries partly offset by increased scrapping 12.0 (Handysize: 2.4% new deliveries vs 1.1% scrapping) 10.0 Low fuel prices increasing ship operating speeds in 3Q15 8.0 increasing effective shipping supply 6.0
Slide 12: 2015 Financial Highlights
As in Annual Report 2015 Financial Highlights US$m 2015 2014 Pacific Basin Dry Bulk (33.8) (39.4) PB Towage 6.2 (15.1) Others (0.2) (1.0) Underlying loss (27.8) (55.5) Unrealised derivative income/(expense) 8.8 (28.9) Sale of towage assets 2.8 (7.6) RoRo and towage exchange loss (1.5) (17.7)
Slide 13: 2015 Pacific Basin Dry Bulk
As in Annual Report 2015 Pacific Basin Dry Bulk Handysize 2015 2014 Change Revenue days (days) 51,600 56,210 -8% TCE earnings (US$/day) 7,870 9,340 -16% Owned + chartered costs (US$/day) 7,930 8,750 +9% Handysize contribution (US$m) (8.4) 28.5 >-100% Supramax Revenue days (days) 23,300 22,410 +4% TC
Slide 14: 2015 Daily Vessel Costs – Handysize
As in Annual Report 2015 Daily Vessel Costs – Handysize Finance cost Charter-hire : Short-term (ST) / Long-term (LT) Depreciation Charter-hire : Index-linked As at 31 December 2015 Opex Inward Charter Commitments Owned Chartered Days & rates US$/day Blended US$7,930 (2014: US$8,750) 2015-2016 Vessel
Slide 15: 2015 Daily Vessel Costs – Supramax
As in Annual Report 2015 Daily Vessel Costs – Supramax Finance cost Charter-hire : Short-term (ST) / Long-term (LT) Depreciation Charter-hire : Index-linked As at 31 December 2015 Opex US$/Day Owned Chartered Inward Charter Commitments 14,000 Blended US$8,190 (2014: US$11,050) Days & Rates 2015-2016
Slide 16: 2015 Balance Sheet
As in Annual Report 2015 Balance Sheet PB US$m Dry Bulk 31 Dec 15 31 Dec 14 Vessels & other fixed assets 1,578 1,611 1,585 Total assets 1,740 2,146 2,308 Total borrowings 926 926 1,000 Total liabilities 1,118 1,175 1,306 Net assets 622 971 1,002 Net borrowings (total cash US$358m) 568 636 Net borrow
Slide 17: Borrowings and Capex
As in Annual Report Borrowings and Capex As at 31 December 2015 US$ Million Investors’ put option Maturity Investors’ put option Maturity Oct 2016 Date July 2019 Date 200 180 171 160 140 124 125 120 106 103 107 100 74 79 74 73 75 80 61 60 50 40 20 0 2016 2017 2018 2019 2020 2021 2022 2023-2027 Vesse
Slide 18: Cash Flow in 2015
As in Annual Report Cash Flow in 2015 As at 31 December 2015 Operating cash flow US$99m EBITDA US$88m 1Q16 Trading Update 18
Slide 19: Our Outlook and Strategy
As in Annual Report Our Outlook and Strategy Dry Bulk Outlook Minor bulk demand is growing and less dependent on China than iron ore and Pacific Basin Benefits: coal. Reduced commodity prices is also stimulating demand. The shipping market has a track record of over-reacting in both directions -
Slide 20: 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 21: Pacific Basin Overview
Appendix: Pacific Basin Overview A leading dry bulk owner/operator of Handysize & Supramax dry bulk ships Cargo system business model – outperforming market rates About 200 dry bulk ships on the water serving major industrial customers around the world Hong Kong headquarters, 12 offices worl
Slide 22: Strategic Model
Appendix: Strategic Model MARKET-LEADING COMPREHENSIVE GLOBAL CUSTOMER FOCUS & SERVICE OFFICE NETWORK Priority to build and sustain long-term Integrated international service enhanced by customer relationships experienced commercial and technical staff around the world Solution-driven approach ensur
Slide 23: 2015 Annual Results – Highlights
As in Annual Report Appendix: 2015 Annual Results – Highlights 2015 2014 EBITDA US$88m US$82m Operating Cash Flow US$99m US$94m Underlying Loss -US$28m -US$56m Net Loss -US$18.5m -US$285m Reduced losses in one of the weakest dry bulk markets on record Positive turnaround of Supramax by focusing
Slide 24: Pacific Basin Dry Bulk – Diversified Cargo
Appendix: Pacific Basin Dry Bulk – Diversified Cargo Our cargo volume (1 Jan 2016 - 24 Mar 2016) Diverse range of commodities reduces product risk China and North America were our largest market More than 60% of business in Pacific and 40% in Atlantic 400 customers! 1Q16 Trading Update 24
Slide 25: Fleet List – Mar 2016
Appendix: Fleet List – 31 Mar 2016* Pacific Basin Dry Bulk Fleet: 226 Average age of core fleet: 6.5 years old Owned Chartered Total Delivered Newbuilding Delivered* Newbuilding Handysize 69 8 56 5 138 Supramax 16 5 64 1 86 Post-Panamax 1 0 1 0 2 Total 86 13 121 6 226 PB Towage : 10 Owned Tugs 8 www
Slide 26: Experienced Management - Team
Appendix: Experienced Management - Team Chairman & BOD Numbers Indicate Years in Company / Years in Shipping CEO Mats Berglund Asset Management 4/30 Morten Ingebrigtsen Finance & Accounting, CFO 27/30 Andrew Broomhead 13/13 HR P.B. Subbiah Company Secretary & Risk 13/22 Kitty Mok 20/20 CTO, Newbuild
Slide 27: Sustainability
Appendix: Sustainability Applying sustainable thinking in our decisions and the way we run our business Creating long-term value through good corporate governance and CSR Corporate Social Responsibility (CSR) Guided by strategic objectives on (i) workplace practices (primarily safety), (ii) th
Slide 28: Convertible Bonds Due 2016
Appendix: Convertible Bonds Due 2016 Issue size US$230 million (US$20.5m face value put back and repaid on 14 April 2014; Current size as at 31 Dec 15: US$106m) 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
Slide 29: Convertible Bonds Due 2018
Appendix: Convertible Bonds Due 2018 Issue size US$123.8 million Maturity Date 22 October 2018 (6 years) Investor Put Date and Price 22 October 2016 (4 years) at par PB’s Call Option 1) Trading price for 30 consecutive days > 130% conversion price in effect 2) >90% of Bond converted / redeemed / pur
Slide 30: Convertible Bonds Due 2021
Appendix: Convertible Bonds Due 2021 Issue size US$125 million Maturity Date 3 July 2021 (approx. 6 years) Investor Put Date and Price 3 July 2019 (approx. 4 years) at par Coupon 3.25% p.a. payable semi-annually in arrears on 3 January and 3 July Redemption Price 100% Initial Conversion Price HK$4.0
Slide 31: Understanding Our Core Market
Appendix: Understanding Our Core Market 1Q16 Trading Update 31
Slide 32: Dry Bulk Supply
Appendix: Dry Bulk Supply Handysize Orderbook 322 vessels (11.9 million dwt) m Dwt 7 8.6% Orderbook Average Over 2016 Scrapping as 6 as % of Age 20 Years % of Existing Fleet Existing (annualised) 5 Fleet 4 4.6% Handysize 4.5% 41% (25,000-39,999 dwt) 3 Shortfall 16% 9 11% 4% 2.4% 2.5% 2 1 Handymax (i
Slide 33: China Dry Bulk, Coal & Iron Ore Trade
Appendix: China Dry Bulk, Coal & Iron Ore Trade Chinese Dry Bulk Trade China Coal Trade China Iron Ore Sourcing Mil Tonnes for Steel Production Mil tonnes Mil Tonnes 1,400 400 1,281 2,100 1,200 27% 350 1,800 27% 1,162 1542 1517 300 1,000 953 935 1,500 250 800 1,200 200 204 900 173 600 150 600 400 32
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