Slide 1: 1Q18 Trading Update
2 _ i 1918 Trading Update Pacific Basin Ll =v an : ARB AR) LOGaER — 12 April 2018
Slide 2: Highlights
Highlights 1
Slide 3: 2018 First Quarter Trading Update
2018 First Quarter Trading Update Handysize and Supramax freight market indices YTD have followed similar pattern as in recent years, although at a significantly higher level with a short seasonal decline in early 2018 and recovery after Chinese New Year In Jan 18 we took delivery of the last of
Slide 4: 2018 First Quarter Performance and 2018 Cover
2018 First Quarter Performance and 2018 Cover Cover as at 6 Apr 2018 US$/day Handysize Supramax Market (BHSI/BSI) index net rate 8,070 10,190 Improvement over 1Q17: Handysize: 1Q +25% / $1,900 PB daily TCE net rate 9,360 11,250 Supramax: PB outperformance 16% / 1,290 10% / 1,060 +40% / $3,220 2Q-4Q
Slide 5: Market Review
Market Review 4
Slide 6: Freight Market Recovery Continues
Freight Market Recovery Continues Handysize Market Spot Rates in 2016-2018 Supramax Market Spot Rates in 2016-2018 # US$/day net* US$/day net* 12,000 10 Apr 2018 12,000 2017 10 Apr 2018 $10,720 10,000 $8,880 2017 10,000 8,000 8,000 2016 6,000 2016 6,000 4,000 4,000 2,000 2,000 0 0 Jan Feb Mar Apr Ma
Slide 7: Impact of Recent Trade Tariffs
Impact of Recent Trade Tariffs Recent Protectionist Measures Impact to the Dry Bulk industry and Pacific Basin US imposed tariffs on steel Now in effect but we do NOT expect a material impact and aluminum from certain Dry bulk cargo flows threatened by these protectionist measures March countries
Slide 8: Historically Low Handysize and Supramax Orderbook
Historically Low Handysize and Supramax Orderbook Total Dry Bulk Orderbook Combined Orderbook: Handysize and Supramax Mil Dwt Mil Dwt 3.4% 2.8% 3.3% 30 28m 3.1% 8 7.7m 27m 26m 25 6 1.8% 1.8% 20 44% 4.9m 45% 4.9m 1.7% Shortfall 14m Shortfall 15 4 0.9% 1.0% 1.0% 2.6m 8m 2.7m 10 2 5 0 0 Scheduled Actua
Slide 9: Better Fundamentals for Handysize
Better Fundamentals for Handysize Orderbook Average Over Over YTD Scrapping as as % of Age 20 Years 15 Years % of Existing Fleet Existing as at 1 Apr 2018 Fleet (annualised) Lower Handysize – 81m dwt orderbook (25,000-41,999 dwt) 6.2% 10 11% 17% 0.6% More Supramax – 195m dwt older 5.2% 9 7% 15% 0.4%
Slide 10: Favourable Dry Bulk Supply and Demand Outlook
Favourable Dry Bulk Supply and Demand Outlook Dry Bulk Supply and Demand % YOY Demand outpacing supply 8 Progressively fewer new ships will deliver from shipyards in 2018 and 2019 6 5.0% Clarksons Research estimate: 3.5% tonne-mile demand growth and 3.5% 2.0% net fleet growth in 2018 4 (3.2% d
Slide 11: Improved Outlook Supports Vessel Values
Improved Outlook Supports Vessel Values Handysize Vessel Values Supramax Vessel Values US$ Million US$ Million 80 60 70 50 60 40 Newbuilding (38,000 dwt): 50 US$22.5m 40 Newbuilding (62,000 dwt): 30 US$24.5m 30 20 20 10 10 5 years (32,000 dwt): US$15.5m 5 years (56,000 dwt): US$18m 0 0 04 05 06 07 0
Slide 12: Outlook and Strategy
Outlook and Strategy 1Q18 Trading Update 11
Slide 13: Competitive Owned Vessel Break-Even Levels
Competitive Owned Vessel Break-Even Levels Handysize Supramax 2018 YTD PB TCE cover rate* 2018 YTD PB TCE cover rate* US$11,370/day US$9,540/day 2017 PB TCE rate $840 US$9,610/day G&A Overheads 2017 PB TCE rate $840 US$8,320/day Finance Cost $1,170 $810 $2,820 Depreciation $3,260 Break-even Break-ev
Slide 14: Our Business Model Continues to Outperform
Our Business Model Continues to Outperform Our business model has been refined over many Our 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 US$1,850 US$1,
Slide 15: Well Positioned for a Recovering Market
Well Positioned for a Recovering Market Our TCE More Owned Efficient Cost Sensitivity toward Outperforms Vessels with Structure Market Rates4 Market Fixed Costs Annual Group 106 G&A Overheads Market Rate Average PB premium 92 80 86 US$75.7m +/- over market indices in 75 US$54.4m US$1,000 last 5 year
Slide 16: Our Outlook and Strategy
Our Outlook and Strategy Outlook 1Q18 market improvement for minor bulk is encouraging, and all-important supply fundamentals look more positive Possible market drivers in the medium term: Fully Handysize & Positive economic growth and commodity demand outlook, low deliveries, Supramax focused a
Slide 17: 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 18: Pacific Basin Overview
Appendix: As in 2017 Annual Report Pacific Basin Overview Owned Fleet Hong Kong HQ Our Vision 200+ Handysize and 12 “To be a Supramax vessels leading ship owner/operator 106 Handysize & Supramax Global Offices 330+ Shore-based staff 3,400+ World’s largest owner and operator of in the dry bulk Bulk C
Slide 19: Appendix: Business Foundation
Appendix: As in 2017 Annual Report Business Foundation Our People Our Record Our Fleet Trusted and Managed In-house Close to you transparent and Highly Versatile 12 local dry 24/7 Strong public Award winning Modern quality Low breakeven bulk offices support balance sheet and CSR policy and ships wit
Slide 20: Appendix: Strategic Model
Appendix: As in 2017 Annual Report 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 Solut
Slide 21: Understanding Our Core Market
Appendix: As in 2017 Annual Report Understanding Our Core Market 1Q18 Trading Update 20
Slide 22: Appendix: Why Handysize? Why Minor Bulk?
Appendix: As in 2017 Annual Report Why Handysize? Why Minor Bulk? Full Year 2017 Global Dry Bulk Trade (Volume) = 5.1 Billion Tonnes (+4% YOY) 29% 24% 10% 37% Iron Ore Coal Grain & Minor Bulk Soybean Minor Bulks & Grain is 47% of total Dry Bulk demand Pacific Basin focuses on these growing marke
Slide 23: Fleet List – 31 Mar 2018
Appendix: Fleet List – 31 Mar 2018 Pacific Basin Dry Bulk Fleet: 242 www.pacificbasin.com Average age of core fleet: 8.2 years old Customers > Our Fleet 106 Vessels 136 Vessels owned Chartered * Total Handysize 80 66 146 Supramax 25 69 94 Post-Panamax 1 1 2 * Average number of vessels operated in Ma
Slide 24: Appendix: Earnings Cover in 2018
Appendix: Earnings Cover in 2018 Contracted Handysize Supramax Revenue Days 41,900 42,630 20,000 days 19,500 days days days 2Q-4Q 2Q-4Q FY18 65% 12,270 66% 29,880 FY18 61% days $11,490 days 44% $10,090 79% 37% $9,540 $8,520 $9,710 $11,370 1Q 1Q 1Q 1Q 100% 100% 100% 100% 12,380 12,750 8,290 7,730 day
Slide 25: Pacific Basin Dry Bulk – Diversified Cargo
Appendix: Pacific Basin Dry Bulk – Diversified Cargo Our Dry Bulk Cargo Volumes in 1Q 2018 (1 Jan – 28 Mar) Diverse range of commodities reduces product risk China and North America were our largest markets About 60% of business in Pacific and 40% in Atlantic 1Q18 Trading Update 24
Slide 26: Appendix: New Regulations
Appendix: As in 2017 Annual Report New Regulations New Regulations Content Impact on the Industry PB actions IMO Ballast Water International Maritime Increased capex for existing shipowners System selected, pending US Treatment - Organization (IMO) Increased potential scrapping Coast Guard a
Slide 27: Appendix: We Will Not Order More Newbuildings Today
Appendix: As in 2017 Annual Report We Will Not Order More Newbuildings Today Market does not need more newbuildings Extra capacity remains in the global fleet through potentially higher operating speed Limited efficiency benefits from newbuildings compared to good quality Japanese-built second
Slide 28: Appendix: 2017 Annual Results - Highlights
Appendix: As in 2017 Annual Report 2017 Annual Results - Highlights US$m 2017 2016 Change EBITDA 133.8 22.8 +111.0 Net profit 3.6 (86.5) +90.1 Cash 244.7 269.2 Net gearing 35% 34% Owned fleet / Total fleet * 105 / 225 92 / 226 Significantly improved dry bulk market supported a much improved EBITDA
Slide 29: Appendix: Significant Improvement in 2017 Financial Results
Appendix: As in 2017 Annual Report Significant Improvement in 2017 Financial Results As at 31 Dec US$m 2017 2016 Owned vessel costs 2017 2016 Revenue 1,488.0 1,087.4 Opex (139.3) (130.9) Voyage expenses (701.5) (555.4) Depreciation (107.6) (97.1) Finance (32.3) (32.8) Time-charter equivalent earning
Slide 30: Appendix: Improvement in Both Handysize and Supramax Segments
Appendix: As in 2017 Annual Report Improvement in Both Handysize and Supramax Segments 2017 2016 Change Handysize contribution (US$m) 31.4 (37.1) >+100% Revenue days (days) 53,360 47,590 +12% TCE earnings (US$/day) 8,320 6,630 +25% Owned + chartered costs (US$/day) 7,660 7,320 -5% Supramax contribut
Slide 31: Appendix: Handysize – Owned Vessel Costs Reducing
Appendix: Handysize – As in 2017 Annual Report Owned Vessel Costs Reducing As at 31 Dec US$7,660/day US$6,360/day US$600* Blended P/L Costs before Blended Cash Cost before Daily G&A Overheads G&A Overheads G&A Overheads (2016: US$660) (2016: US$7,320) (2016: US$6,090) Blended US$7,660 (FY2016: US$7,
Slide 32: Appendix: Supramax – More Owned Ships with Lower Daily Cost
Appendix: Supramax – As in 2017 Annual Report More Owned Ships with Lower Daily Cost As at 31 Dec US$9,000/day US$8,310/day US$600* Blended Daily P/L Costs Blended Daily Cash Cost Daily G&A Overheads before G&A Overheads before G&A Overheads (2016: US$660) (2016: US$6,830) (2016: US$6,390) 2017 Dail
Slide 33: Appendix: Strong Balance Sheet and Liquidity
Appendix: As in 2017 Annual Report Strong Balance Sheet and Liquidity US$m 2017 2016 Vessels & other fixed assets 1,798 1,653 Total assets 2,232 2,107 Total borrowings 881 839 Total liabilities 1,070 1,066 Total Equity 1,161 1,041 Net borrowings (total cash US$245m) 636 570 Net borrowings to net boo
Slide 34: Appendix: No Newbuilding Capex Ahead
Appendix: As in 2017 Annual Report No Newbuilding Capex Ahead As at 31 Dec Cash Flow in 2017 Schedule of Repayments and Vessel Capital Commitments Cash and deposit balance Secured borrowings (US$763.3m) Cash inflow Vessel capital commitments (US$20.8m) Cash outflow Convertible bond (face value US$12
Slide 35: Appendix: Atlantic Rates Stronger than Pacific
Appendix: Atlantic Rates Stronger than Pacific Handysize (BHSI) Supramax (BSI) # US$/day net* US$/day net* 16,000 12,000 Atlantic 14,000 Atlantic $10,740 10,000 $8,960 12,000 8,000 10,000 8,000 6,000 Pacific Pacific 6,000 $10,320 4,000 $8,790 4,000 2,000 2,000 0 0 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17
Slide 36: 2017 Was a Demand Story
Appendix: As in 2017 Annual Report 2017 Was a Demand Story Dry Bulk Trade Volumes Key Drivers in 2017 Million Tonnes YOY change Stronger seaborne trade growth apparent 4% across most dry bulk cargo categories – Iron Ore 1,474 Coal 1,201 5% both major and minor bulks 4% Stronger Chinese industria
Slide 37: Appendix: China Major and Minor Bulk Trade
Appendix: China Major and Minor Bulk Trade China Coal Trade 2018 Chinese Minor Bulk Imports Mil Tonnes Mil Tonnes 350 35 288 300 263 Increased 17% YOY 247 30 250 25 200 20 292 150 15 271 100 256 10 50 5 0 -9 -8 -5 0 -50 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 06 07 08 09 10 11 12 13 14 15 16
Slide 38: Appendix: Sustainability
Appendix: As in 2017 Annual Report Sustainability Applying sustainable thinking in our decisions and the way we run our business 2017 CSR Report Creating long-term value through good corporate www.pacificbasin.com/ar2017 governance and CSR Corporate Social Responsibility (CSR) Guided by strate
Slide 39: Appendix: 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