Pacific Basin Shipping Limited · HKEX:2343
Pacific Basin Shipping — HSBC Transport, Infrastructure & Logistics Conference 2019
19 slides from Pacific Basin Shipping's conference presentation, Jun 25, 2019
Slide 1: HSBC Transport, Infrastructure & Logistics Conference
HSBC Transport, Infrastructure & Logistics Conference June 2019 Mats Berglund, CEO, Pacific Basin 25 June 2019
Slide 2: A Weak Start to the 2019 Dry Bulk Market
A Weak Start to the 2019 Dry Bulk Market PB Handysize TCE Performance PB Supramax TCE Performance US$/day net* US$/day net* PB Handysize PB 1Q TCE: PB Supramax PB 1Q TCE: 12,000 14,000 $9,080 $10,400 Baltic Handysize Index (BHSI)* Baltic Supramax Index (BSI)* 12,000 10,000 10,000 8,000 8,000 6,000 6
Slide 3: Much Less Soybeans (Animal-feed) from US to China
Much Less Soybeans (Animal-feed) from US to China Oct-Jan Source: USDA Pacific Basin 3
Slide 4: Dry Bulk Market Factors
Dry Bulk Market Factors Why weak market? What can make it better? Trade war – less soybean Minor bulk growth African Swine Fever – less soybean Chinese stimulus Mississippi water levels Chinese steel production Iron ore disruptions – Fall Army Worm Vale dams & Australian weather IM
Slide 5: Minor Bulk Expected to Drive Demand in 2019
Minor Bulk Expected to Drive Demand in 2019 Overall Dry Bulk Tonne-miles Demand Growth Since 2010 Annual Change in Dry Bulk Tonne-miles Demand Annual change dry bulk demand Iron Ore 16% Bn tonne-miles Coal 13.4% 1,500 +4.7% 14% Grain Minor Bulk 12% 1,200 +3.1% +2.9% 10% 900 +1.7% +1.8% 8% +2.2% +1.9
Slide 6: China Reached Another All-time High for Crude Steel Production in May
China Reached Another All-time High for Crude Steel Production in May China produced 89.1 million tonnes of crude steel in May which is equivalent to an annualised pace of 1.049 billion tonnes The share of China’s steel that gets exported has been declining the last few years. In May the steel e
Slide 7: YTD Iron Ore and grain Weigh on Chinese Imports while Most Minor Bulks are up
YTD Iron Ore and grain Weigh on Chinese Imports while Most Minor Bulks are up Source: Bloomberg Pacific Basin 7
Slide 8: Better Supply Fundamentals for Handysize / Supramax (I)
Better Supply Fundamentals for Handysize / Supramax (I) Scheduled Average Over Over YTD Scrapping as Orderbook Age 20 Years 15 Years % of Existing Fleet as % of as at 1 Apr 2019 Existing (annualised) Fleet Lower Handysize – 84m dwt orderbook (25,000-41,999 dwt) 5.6% 10 11% 19% 0.2% More Supramax – 1
Slide 9: Better Supply Fundamentals for Handysize / Supramax (II)
Better Supply Fundamentals for Handysize / Supramax (II) Overall Dry Bulk Supply Development Handysize / Supramax Supply Development Mil Dwt Current Orderbook: Mil Dwt Current Orderbook: 100 Total: 11.1% 35 Total: 6.8% 80 30 37% 49% 4.3% 5.1% 1.7% 3.3% 2.8% 0.7% 42% 48% 25 60 36% 37% 20 41% 34% 40 1
Slide 10: Favourable Minor Bulk Supply and Demand Outlook
Favourable Minor Bulk Supply and Demand Outlook Total Dry Bulk Supply and Demand Minor Bulk Demand and Handysize/Supramax Supply % YOY Change 8% Tonne-mile Demand Growth (%) 6% 5.1% Net Fleet Growth (%), (deliveries net of scrapping) 5% 4.2% 6% 4% 4.2% 4.7% 3% 2.5% 1.9% 2% 4% 3.1% 2.9% 2.5% 1% 0.8%
Slide 11: Dry Bulk Market Factors
Dry Bulk Market Factors Why weak market? What can make it better? Trade war – less soybean Minor bulk growth African Swine Fever – less soybean Chinese stimulus Mississippi water levels Chinese steel production Iron ore disruptions – Fall Army Worm Vale dams & Australian weather IM
Slide 12: Pacific Basin Strategy and Position
Pacific Basin Strategy and Position Pacific Basin 12
Slide 13: Understanding Our Core Market
Understanding Our Core Market Pacific Basin 13
Slide 14: Our Business Model Continues to Outperform
Our Business Model Continues to Outperform Our business model has been refined over many TCE Outperformance Compared to Market years. We are able to generate a TCE earnings in Last 5 Years premium over market rates because of our high laden percentage (minimum ballast legs), which is US$1,910 US$1,4
Slide 15: Competitive at Every Level
AR18 Results Competitive at Every Level 1 TCE/day Outperforming indexes and most companies who report publicly Cargo focused business model with 90% plus laden percentage 2 Opex/day US$3,850*/day in 2018 Scale, focus and sister ship effects In-house management 3 G&A/day Scale benefits an
Slide 16: Well Positioned for the Future
Well Positioned for the Future Our TCE More Owned Efficient Cost Sensitivity toward Outperform Vessels with Structure Market Rates* Market Fixed Costs Annual Group Market Rate 106 111 92 G&A Overheads +/- 86 Average PB premium 75 80 US$75.7m US$1,000 over market indices in daily TCE US$59.8m last 5
Slide 17: Our Strategic Direction and Priorities
AR18 Results Our Strategic Direction and Priorities Maintain and grow our cargo focus and scale Continue to be both a fully integrated owner and operator – Not only owned ships, not only asset light Maintain empowered local chartering and operations close to customers – With best in class cent
Slide 18: There is life after IMO 2020 !!
There is life after IMO 2020 !! Pacific Basin 18
Slide 19: 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,
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