Pacific Basin Shipping Limited · HKEX:2343

Pacific Basin Shipping — Goldman Sachs China Conference 2015

38 slides from Pacific Basin Shipping's conference presentation, Oct 26, 2015

1. Slide 1: Pacific Basin Goldman Sachs China Conference 2015

   2 Pacific Basin Goldman Sachs China Conference 2015 He 2015 APS weg 26 Oct 2015 Navigating with resilience Experienced team j i [ecto fleet N Customers first &

2. Slide 2: 2015 Third Quarter Highlights

   2015 Third Quarter Highlights Pacific Basin Dry Bulk 太平洋乾散貨船  我們的業務模式於第三季為我們帶來高於現貨巿場租金的表現： Our business model enabled us to outperform spot market in 3Q: Average Daily Earnings Q3 (US$/day) Q3 (Outperformance) YTD (US$/day) 日均收入 第三季（美元／日） 第三季（日均收入高於巿場） 本年至今（美元／日） Handysize TCE 小靈便型乾散貨船收入 $8,350 +39

3. Slide 3: Cargo System Business Model – Outperforming Market Rates

   Cargo System Business Model – Outperforming Market Rates Cargo Contract Business Model –  Experienced staff & global office network Outperforming Market Indices 富經驗的團隊及覆蓋全球的辦事處網絡  Large fleet of high-quality substitutable ships 龐大的高質素可互換貨船船隊 US$/day  Large portfolio of cargo contracts & relations

4. Slide 4: Pacific Basin Dry Bulk – Earnings Cover

   Pacific Basin Dry Bulk – Earnings Cover Handysize Handymax 53,090 Revenue Days 48,860 20,630 20,450 Revenue Days Revenue Days Revenue Days 4Q 76% 4Q 34,740 4Q $9,250 9,570 59% Revenue Days 71% 79% 4Q $11,170 3,860 days $8,820 $8,400 days 9,450 Revenue Days 41,510 39,290 16,900 16,590 days days days

5. Slide 5: Dry Bulk Spot Market

   Dry Bulk Spot Market Baltic Handysize Index (BHSI) & Baltic Supramax Index (BSI) US$ (net) / day $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 23 Oct 2015: BSI: $6,439 $6,000 $4,000 BHSI: $4,993 $2,000 $0 2012 2013 2014 2015  QoQ improvement largely driven by healthier conditions in Atlantic on st

6. Slide 6: Handysize Vessel Values

   Handysize Vessel Values US$ Million 55 50 45 40 35 30 23 Oct 2015 25 Newbuilding (35,000 dwt): US$20.5m 20 15 5 years (32,000 dwt): US$11.5m 10 04 05 06 07 08 09 10 11 12 13 14 15  Second hand values substantially flat in recent months 二手貨船價值於近月大致沉寂 Source: Clarksons Platou 3Q15 Trading Update 6

7. Slide 7: Dry Bulk Supply & Demand

   Dry Bulk Supply & Demand Quarterly YOY change % 25% 20% Supply 15% 10% Demand 5% 0% -5% 2010 2011 2012 2013 2014 2015 Demand Supply Analyst's demand forecast  Demand disappointment due primarily to much lower Chinese coal imports 需求增長低於預期，主要受中國煤炭入口減少拖累 Source: Clarksons Platou 3Q15 Trading Update 7

8. Slide 8: Dry Bulk Supply – Self Correcting Factors

   Dry Bulk Supply – Self Correcting Factors New Vessel Ordering is Down Number of Chinese Delivery Slippage Per quarter annualised in % of fleet (dwt) 25% yards delivering Handy 實際新建造貨船交付 24% bulk vessels decreased 數目較預期訂單少 from 54 in 2012 20% to 21 in 2015 Orderbook Cancellations & 15% 建造靈便型乾散貨船的中 Co

9. Slide 9: Chinese Minor Bulk Imports

   Chinese Minor Bulk Imports Million Tonnes 30 25 20 15 10 5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2015 2014 2013 Chinese imports of 7 minor bulks including Logs, Soyabean, Fertiliser, Bauxite, Nickel, Copper Concentrates & Manganese Ore These 7 commodities make up over one third of the carg

10. Slide 10: 1H15 Balance Sheet

    1H15 Balance Sheet PB PB US$m Dry Bulk Towage 30 Jun 15 31 Dec 14 Vessels & other fixed assets 貨船及其他固定資產 1,535 39 1,578 1,585 Total assets 資產總額 1,703 46 2,194 2,308 Total borrowings 貸款總額 930 - 930 1,000 Total liabilities負債總額 1,144 9 1,199 1,306 Net assets 資產淨值 559 37 995 1,002 Net borrowings (total

11. Slide 11: Cash Flow

    Cash Flow As at 30 June 2015 Operating cash flow US$58.8m 經營所得現金流 EBITDA US$41.5m 稅息折舊及攤銷前溢利 (Net of US$124m CB proceeds) 3Q15 Trading Update 11

12. Slide 12: Borrowings and Capex

    Borrowings and Capex As at 30 June 2015 (2016 CB updated as at 1 Oct 2015) Investors’ put option Maturity Investors’ put option Maturity US$ Million Oct 2016 Date Jul 2019 Date 200 182 183 180 Bought back US$27million 160 of 2016 CB in 3Q15 140 155 124 125 120 93 94 100 84 86 80 63 64 58 58 53 60 46

13. Slide 13: 1H15 Daily Vessel Costs – Handysize

    1H15 Daily Vessel Costs – Handysize Finance cost Charter-hire : Short-term (ST) / Long-term (LT) Depreciation Charter-hire : Index-linked As at 30 June 2015 Opex Inward Charter Commitments Owned Chartered Days & rates Including finance lease vessels 2015-2016 US$/day Blended US$7,870 (2014: US$8,750

14. Slide 14: Our Increased Focus on Dry Bulk

    Our Increased Focus on Dry Bulk Early 2012 2015 Four business units Fully dry bulk focused 四個業務分部 全力發展乾散貨船分部 US$m ME Towage 17 Newbuildings Minor player Terminals, etc World’s largest with no competitive Towage Handysize advantage owner & operator 不具競爭優勢的 全球最大的 RoRo 小眾營運商 81 小靈便型乾散貨船 Dry Bulk Ships

15. Slide 15: Dry Bulk Market and Strategy

    Dry Bulk Market and Strategy Dry Bulk Market 乾散貨運市場 Pacific Basin Benefits  Uncertain market situation - Oversupplied global fleet and reduced growth in dry 太平洋航運之優勢 bulk commodity demand – especially coal into China 巿場因素不確定 – 全球船隊供應過剩及乾散貨商品需求增長放緩 – 尤其是中國的 Now fully Handy focused 煤炭進口 全力集中發展靈便型乾散貨運

16. Slide 16: 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,

17. Slide 17: Appendix: Pacific Basin Overview

    Appendix: Pacific Basin Overview  A leading dry bulk owner/operator of Handysize & Handymax dry bulk ships  Flexible Pacific Basin Dry Bulk business model  Large fleet of uniform, interchangeable, modern ships  Mix of owned and long-term, short-term chartered ships  Operating mainly on long ter

18. Slide 18: Appendix: Strategic Model

    Appendix: Strategic Model OUR STRONG CORPORATE & OUR LARGE VERSITILE FLEET FINANCIAL PROFILE Striving for best-in-class internal and external Fleet scale and interchangeable high-quality dry reporting, transparency and corporate stewardship bulk ships facilitate service flexibility to Robust balance

19. Slide 19: Pacific Basin Dry Bulk – 1H15 Performance

    Appendix: Pacific Basin Dry Bulk – 1H15 Performance US$ million 1H15 1H14 Dry Bulk net loss (15.4) (11.4)  Handysize contribution (0.6) 26.2  Handymax contribution 10.4 (10.7)  Post-Panamax contribution 2.7 2.7  Direct overheads (24.6) (24.7)  Indirect overheads (3.3) (4.9) EBITDA 39.3 49.5 Ves

20. Slide 20: 2015 Interim Financial Highlights

    Appendix: 2015 Interim Financial Highlights 1H15 1H14 US$m Pacific Basin Dry Bulk (15.4) (11.4) PB Towage 1.4 (9.2) Others (0.6) (0.9) Underlying loss (14.6) (21.5)  Unrealised derivative income/(expense) 16.7 (0.3)  Sale of interests in bunker tanker joint venture 3.7 -  Towage impairments and p

21. Slide 21: 1H15 Pacific Basin Dry Bulk

    Appendix: 1H15 Pacific Basin Dry Bulk Handysize 1H15 1H14 Change Revenue days (days) 26,620 27,200 -2% TCE earnings (US$/day) 7,940 10,210 -22% Owned + chartered costs (US$/day) 7,870 9,120 +14% Handysize contribution (US$m) (0.6) 26.2 -102% Handymax Revenue days (days) 10,280 11,640 -12% TCE earnin

22. Slide 22: Pacific Basin Dry Bulk – Diversified Cargo

    Appendix: Pacific Basin Dry Bulk – Diversified Cargo Our Dry Bulk Cargo Volume in 3Q15   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! Data as at 24 Sep 2015 3Q15 Trading U

23. Slide 23: Fleet List – 30 September 2015

    Appendix: www.pacificbasin.com Fleet List – 30 September 2015 Fleet Details Vessels in operation Newbuildings on order Total Owned Chartered Total Owned Chartered Total Dry Bulk Fleet Handysize 66 72 138 10 6 16 154 Handymax 16 59 75 5 1 6 81 Post-Panamax 1 1 2 - - - 2 Total Dry Bulk Vessels 83 132

24. Slide 24: Experienced Management - Team

    Appendix: Experienced Management - Team Chairman & BOD Numbers Indicate Years in Company / Years in Shipping CEO Mats Berglund Asset Management 3/29 Morten Ingebrigtsen Finance & Accounting, CFO 26/29 Andrew Broomhead 12/12 HR P.B. Subbiah Company Secretary & Risk 12/21 Kitty Mok 19/19 Chartering Ch

25. Slide 25: 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

26. Slide 26: PB Towage

    Appendix: PB Towage  Towage activities significantly reduced after sale of harbour towage business 1H15 and our shareholding in OMSA US$ million  About US$3.7m gain on disposal of our share in a bunker tanker Towage net profit 1.4 Middle East: EBITDA 2.2  Remaining towage assets are operating in

27. Slide 27: 1H15 Daily Vessel Costs – Handymax

    Appendix: 1H15 Daily Vessel Costs – Handymax Finance cost Charter-hire : Short-term (ST) / Long-term (LT) Depreciation Charter-hire : Index-linked As at 30 June 2015 Opex Owned Chartered Inward Charter Commitments US$/Day Days & Rates 14,000 Blended US$8,330 (2014: US$11,050) 2015-2016 Vessel Days 1

28. Slide 28: Vessel Operating Lease Commitments

    Appendix: Vessel Operating Lease Commitments As at 30 June 2015 77 3Q15 Trading Update 28

29. Slide 29: Historical earnings

    Appendix: Historical earnings www.pacificbasin.com Annual Report – Key Performance Indicators 3Q15 Trading Update 29

30. Slide 30: Historical Owned and Chartered-in Cost

    Appendix: Historical Owned and Chartered-in Cost 3Q15 Trading Update 30

31. Slide 31: 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; Remaining: US$210m) 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 arrears on 12 Apri

32. Slide 32: 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

33. Slide 33: 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

34. Slide 34: Understanding Our Core Market

    Appendix: Understanding Our Core Market Our Focus 3Q15 Trading Update 34

35. Slide 35: Dry Bulk Supply

    Appendix: Dry Bulk Supply Handysize Orderbook 379 vessels (13.9m dwt) m Dwt 8.9% 7 24% Shortfall Orderbook as Average Over Scrapping as % of 6 % of Existing Age 25 Years Existing Fleet 8.7% Fleet (Annualised) 5 4.7% 5.2% 4 6.6% Handysize 19% 9 8% 6% 3 (25,000-39,999 dwt) 6.5m 2 4.9m 1 Handymax 22% 8

36. Slide 36: China at Post Industrialisation Stage

    Appendix: China at Post Industrialisation Stage Steel Consumption Per Capita Tons per Capital 1.0  China growth matches historical trend in 0.9 Japan and Korea 0.8  Suggests strong growth in dry bulk segment to remain for medium term 0.7  Similar trend for electricity and cement 0.6 0.5 0.4 0.3 0

37. Slide 37: Dry Bulk Effective Demand

    Appendix: Dry Bulk Effective Demand % YOY 16 International cargo volumes Congestion effect 12 Tonne-mile effect China coastal cargo, off-hire & 9.2 ballast effect 8 Net demand growth 4.2 4 3.2 0 -1.7 -2.0 -4 04 05 06 07 08 09 10 11 12 13 14 1Q15 2Q15 3Q15 (prelim) Source: Clarksons. Platou 3Q15 Trad

38. Slide 38: China Dry Bulk Trade, Iron Ore & Coal Demand

    Appendix: China Dry Bulk Trade, Iron Ore & Coal Demand Chinese Dry Bulk Trade Volume China Coal Net Import China Iron Ore Sourcing for Steel Production % of total dry Mil tonnes Million Tonnes Million Tonnes Bulk trade 400 1,400 2100 32% 1,301 1,297 30% 28% 28% 350 1,200 1800 292 1,543 1,543 24% 300

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