Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping — Investor Presentation (December 2007)
31 slides from Great Eastern Shipping's investor presentation, December 2007
Slide 1: Business & Financial Review Dec 2007
The Great Eastern Shipping Co. Ltd. Business & Financial Review Dec 2007 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: Corporate Profile
Corporate Profile The Great Eastern Shipping Co. Ltd. Incorporated in 1948 Shipping Business Offshore Business Wet bulk Through wholly owned subsidiary Greatship (India) Ltd Product Tankers Offshore oil field Support & Crude Tankers (includes LPG) Logistics Services Dry bulk 3
Slide 4: Company at a glance
Company at a glance A India’s largest private sector Shipping Company A In its 60th year of operations A Diverse asset base with global operations A 25 years of uninterrupted dividend track record A Rated ‘AAA’ (Domestic Currency Debt) since 1996 A High liquidity; adequate floating stock Shareholdin
Slide 5: Asset Profile Shipping business
Asset Profile Shipping business q 47 ships aggregating 3.14 Mn dwt, avg.age 10.7 years q 34 Tankers avg.age 9.8 years (77% in tonnage terms) q 12 Crude oil carriers (6 Suezmax, 6 Aframax) avg.age 7.5 years ( 2 single hull) q 20 Product tankers (2 Panamax ,11 MR, 7 GP) avg.age 13.3 years (11 single h
Slide 6: Committed CAPEX – Shipping Business
Committed CAPEX – Shipping Business Committed Capex of around USD 397 Mn - 8 new building contracts aggregating 0.57 mn. dwt üFY 2009 - 2 NB, LR 1 Product Tankers (Q2) üFY 2010 - 2 NB, LR 1 Product Tankers (Q3) - 2 NB, Supramax Dry Bulk Carriers (Q4) üFY 2011 - 1 NB, Kamsarmax Dry Bulk Carrier (Q4)
Slide 7: Asset Profile Offshore business - Greatship (I) Ltd.
Asset Profile Offshore business - Greatship (I) Ltd. (wholly owned subsidiary) & its subsidiary companies Ø 3 Platform Supply Vessels (PSV) Ø Committed Capex of around USD 632 Mn* ü FY 2008 - 2 NB 80T AHTSV (CDL) (one each in Q3 and Q4) 5 vessels at end of FY08 ü FY 2009 - 2 NB PSVs (Aker) delivery
Slide 8: Committed Capex
Committed Capex Committed Equity Participation of USD 135 mn G E Shipping Greatship (I) Ltd (Committed CAPEX (Committed CAPEX USD 632 mn) USD 397 mn) Already Balance infused infusion USD 120 mn within FY09 Total committed CAPEX of USD 1.03 bn Spread over next two & half years To be financed with a m
Slide 9: Business Philosophy
Business Philosophy Strive to deliver through the cycle Risk Management Mechanism Revenues Cost - Mix of Spot v/s Time - Bunker Hedging - FX Hedging - Interest Rates “Planning for future” rather than “forecasting for future” 9
Slide 10: Financial Review
Financial Review 10
Slide 11: Performing through the years...
Performing through the years. . . 70.0 3.5 3.26 Avg Cash Profits for the last 5 years: Rs. 886 crs 3.02 2.92 60.0 58.0 3 55.0 50.0 2.47 2.5 42.3 Rs/ Share mn dwt 40.0 2 1.37 1.32 30.0 1.28 1.5 24.3 0.87 0.88 20.0 0.71 1 8.8 11.2 11.5 11.4 9.0 10.0 8.0 6.5 0.5 5.7 4.0 4.0 4.0 4.4 2.0 4.3 1.5 2.7 0.0
Slide 12: Performing through the years...
Performing through the years. . . 450 50 405 43.80 45 400 Avg ROE for the last 5 years: 34% 40.60 350 34.80 40 335 282 35 300 Rs. Per share 32.40 30 250 % 19.50 201 25 200 17.48 15.96 157 20 139 150 115 15 100 84 67 67 79 10 53 62 50 50 5 0 0 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06* 2006-07
Slide 13: Historical NAV per share (only shipping business)
Historical NAV per share (only shipping business) As on Rs/Share 31-March-2005 282 31-March-2006 335 31-March-2007 405 30-June-2007 452 30-September-2007 492 13
Slide 14: Financial Highlights of Q2 FY08 performance
Financial Highlights of Q2 FY08 performance (Rs.crs) Q2 FY08 Q2 FY07 % change H1 FY08 H1 FY07 % change Income from Operations 601.3 522.1 15% 1238.4 955.9 30% Operating Profit 277.8 265.5 5% 590.5 498.6 18% Operating Margin 46% 50% 48% PAT (excl. AS 11 impact) 295.2 235.4 26% 613.1 476.5 29% Cash Pr
Slide 15: Earnings Mix
Earnings Mix GE Shipping Average TCY Details – Q2 FY08 Mix of Spot & Time Average TCY ($ per day) Q2 FY08 Q2 FY07 % change Days Q2 FY08 Q2 FY07 H1 FY08 Crude Carriers 31,836 32,015 -1% Dry Bulk Product Carriers 19,337 20,834 -7% Spot % 57% 52% 55% Gas Carriers 15,018 16,386 -8% Time % 43% 48% 45% Dr
Slide 16: Recent Highlights of Shipping Markets
Recent Highlights of Shipping Markets n Sharp decline in Tanker rates due to - - General summer depression - Backwardation in oil prices n Correction has already started and it’s a SMART recovery n Dry Bulk Rates continued their extraordinary northward journey - Strong demand for iron ore, coal & mi
Slide 17: Ship prices continue to be firm
Ship prices continue to be firm Asset Price Movement (5 yr old) 160 160 140 140 120 120 $ USD mn. $ USD mn. 100 100 80 80 60 60 40 40 20 20 0 0 16/09/2003 Dry bulk Tankers Time line- Sep 2003 till Dec 3, 2007 VLCC AFRAMAX CAPESIZE PANAMAX(DRY) Source: Baltic Sale & Purchase Assessment 17
Slide 18: Shipping Industry Outlook
Shipping Industry Outlook 18
Slide 19: Oil Markets clouded by uncertainty
Oil Markets clouded by uncertainty IEA – Nov’07 =In the past oil demand growth forecasts have been significantly way off CY 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 Forecast Actuals Forecast Actuals Forecast Actuals Forecast Actuals Forecast Actuals Oil demand 1.5% 3.7% 2.2% 0.94% 1.8% 0.9%
Slide 20: Outlook for Crude Tankers
Outlook for Crude Tankers o US crude oil inventories coming off to near 5 year avg levels (20 days forward cover) o In the short term, winter demand has kicked in thereby sending rates soaring again o Conversions & slowdown in fresh ordering could cause supply shocks o Risks: Slowing down of global
Slide 21: Outlook for Product Tankers
Outlook for Product Tankers n Increased long haul activity n Seasonality to continue playing an important role n Market in the east has picked up but west is still improving n Longer term structural shift of trade patterns seen Risks : Excessive supply could be a concern for 2008 2007 2008 2009 2010
Slide 22: Outlook of Dry Bulk Market
Outlook of Dry Bulk Market n Demand for dry cargo to increase by over 5% annually from 2007-2010 n China’s steel production growing to 600mn tons in 2008 & 800 mn by 2010 n Usage of steam coal to rise as oil & gas prices remain high n Congestion at load ports to remain, causing volatility in rates n
Slide 23: Dry Bulk – Growth Driven by Asia
Dry Bulk – Growth Driven by Asia Breakup of commodities transported Imports - Regional Distribution Others 4% Iron Ore N.America 4% M.East 27% 4% Africa S.America 4% Minor 3% Bulk Others 2% 33% Europe 24% Asia Coal 59% Grains 26% 10% Asia contributes to 59% of dry bulk imports, whereas North America
Slide 24: Offshore Industry Outlook
Offshore Industry Outlook 24
Slide 25: Offshore oil field services industry
Offshore oil field services industry FEnergy Security concerns high on consumer countries agenda. F Between 1985 to 2002, investment in global E & P almost stagnant. Since 2002, it is growing in between 9% to 13%. F Offshore will continue to account for increasing proportion of oil supply. FASIA cur
Slide 26: India's Oil Reserves- How the competition Stacks up
India’s Oil Reserves- How the competition Stacks up 60 Oil Reserves in bn. Barrels No.of yrs in which reserves will be used up 40 ? 25 18.3 20 15 11.2 5.8 Russia China Brazil India STATUS: 5.8 billon barrels IMPACT: Not only are India’s oil reserves totally inadequate, they are also expected to last
Slide 27: Offshore Industry – gearing up
Offshore Industry – gearing up Source: Lehman Brothers Source: Douglas-Westwood - Worldwide expenditure increasing year on year - $267 billion expenditure in 2006 - Near 100% industry utilization drives prices & rates 27
Slide 28: Offshore Supply Market
Offshore Supply Market OSV Fleet Summary (Nos) AHTSVs PSVs Others Current Fleet* 2,073 1,482 1,274 Aging Fleet Orderbook 461 219 166 ü 52% of the total fleet % of O/B to current fleet 22.2% 14.7% 13.0% over 25 years * Data as on Oct’07 Source: Clarkson Offshore Installations Delivery Schedule Type C
Slide 29: India's Offshore oil field services industry
India's Offshore oil field services industry Onshore Offshore TOTAL Deep water Shallow water NELP I 1 7 16 24 NELP II 7 8 8 23 NELP III 8 8 7 23 NELP IV 10 11 - 21 NELP V 12 6 2 20 NELP VI 25 24 6 55 NELP VII 29 19 9 57* TOTAL 92 83 48 223 Source:DGH, * Blocks allotted till date Pre NELP i.e (1993 –
Slide 30: Good times, but how long will it last?
Good times, but how long will it last? Positives: ü High vessel utilisations and strong charter dayrates ü Tenders continuing to be issued for long term work ü High E&P budgets leading to non-traditional market development ü New players driving technology and efficiency Potential Negatives: • Level
Slide 31: THANK YOU
THANK YOU visit us at www.greatship.com 31
The Great Eastern Shipping — Investor Presentation (December 2007) on 6ix