Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping Company — FY2019 Earnings Presentation
44 slides from Great Eastern Shipping's earnings presentation, May 27, 2019
Slide 1: Business Overview
BUSINESS OVERVIEW 27 May 2019
Slide 2: Forward looking statements disclaimer
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 directions, prospects and f
Slide 3: Corporate Profile
CORPORATE PROFILE Offshore Shipping (Bulk) (Through wholly-owned subsidiary Greatship (India) Limited) Tankers • Crude Dry Bulk Logistics Drilling • Products/LPG India’s largest private sector shipping company over 70 years of experience 3
Slide 4: Shareholding Pattern
FII/FPI 19% Promoters 30% SHAREHOLDING Govt./FI 25% PATTERN Public 20% Shareholding Pattern as on 31 March 2019 4
Slide 5: Fleet Profile
FLEET SHIPPING PROFILE Fleet DWT Number of Ships Average Age (Yrs.) Crude Carriers 1,608,683 12 13.64 Product Carriers 987,207 17 11.54 Gas Carriers 224,113 5* 17.67 Dry Bulk Carriers 1,026,462 13 6.55 Total 3,846,465 47 11.44 OFFSHORE Fleet Number of Units Average Age (Yrs.) Jack Up Rigs 4 7.53 Pla
Slide 6: Philosophy
PHILOSOPHY | BUSINESS
Slide 7: 4 Keys to Our Success
4 KEYS TO OUR SUCCESS In-House Dynamically Strong Diversified technical & managing balance Fleet commercial cycles sheet management 7
Slide 8: Net Debt/Equity & Total Capital Employed (Consolidated)
NET DEBT/EQUITY & TOTAL CAPITAL EMPLOYED (CONSOLIDATED) USD Mn 3,000 0.80 0.70 2,500 0.60 2,000 0.50 1,500 0.40 0.30 1,000 0.20 500 0.10 - 0.00 FY1993 FY1994 FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY
Slide 9: Dividend/Share (30+ Years Continuous Dividend)
- 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 INR/Share FY1993 FY1994 FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY2001 FY2002 DIVIDEND/SHARE FY2003 Dividend/Share FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 Dividend Yield (RHS) FY2012 FY2013 FY2014 FY2015 FY2016 (30+ YEARS CONTINUOUS DIV
Slide 10: ROE & ROCE (Consolidated)
ROE & ROCE (CONSOLIDATED) 45% 40% Average ROCE: 12% 35% Average ROE: 18% 30% 25% 20% 15% 10% 5% 0% ROCE (Consolidated) ROE (Consolidated) Average ROCE Average ROE 10
Slide 11: BWTS & Scrubber Installation Schedule
BWTS & SCRUBBER INSTALLATION SCHEDULE 40 35 35 30 25 No. of Vessels 20 15 12 8 9 10 7 6 7 5 1 0 Installed To be Installed CY2019 CY2021 CY2022 CY2023+ BWTS Scrubber • Total 8 Vessels have been fitted with BWTS and 35 vessels are scheduled to be installed with BWTS • 1 Vessel has been fitted with Scr
Slide 12: First Scrubber Installation
FIRST SCRUBBER INSTALLATION Jag Lokesh – First Indian flagged tanker vessel to be fitted with Exhaust Gas Cleaning System ahead of the IMO 2020 regulation deadline 12
Slide 13: Market
MARKET SHIPPING
Slide 14: IMO Regulations on Ballast Water Treatment System
IMO REGULATIONS ON BALLAST WATER TREATMENT SYTEM What is Ballast Water Treatment System(BWTS) IMO regulations? 1. Ballast water has to be taken onboard by ships for stability and can contain thousands of aquatic or marine microbes, plants and animals, which are then carried across the globe. Untreat
Slide 15: IMO 2020
IMO 2020 What is IMO 2020? 1) The International Maritime Organization (IMO) will require shipowners to reduce sulfur emissions from 3.5% currently to 0.5% starting 1st January, 2020. 2) There are two options for shipowners to comply with IMO 2020 sulfur regulations: • Installing a scrubber to enable
Slide 16: IMO 2020
IMO 2020 Type of Fuel Sulfur Content Composition 2020 Possible issues post 2020 Low Availability, Fuel oil from Scrubber HSFO 3.5% refinery Installed Vessels Higher CAPEX for scrubbers Allowed Diesel from the MGO 0.1% refinery including ECA Expensive Areas Blends HSFO with a straight Allowed in Non-
Slide 17: Key Points on Tanker Market
KEY POINTS ON TANKER MARKET Asset •VLCC 5 yr old asset prices increased about 8% Y-O-Y* Prices •Suezmax 5 yr old asset prices increased about 12% Y-O-Y* Freight Rates •BCTI rose by 10% & BDTI fell 35% during Q1CY19 sequentially •U. S. production is up about 1.8 million barrels a day year-on-year, U.
Slide 18: Tankers – Asset Price Movement (5-Year Old)
TANKERS – ASSET PRICE MOVEMENT (5-YEAR OLD) VLCC Suezmax Aframax VLCC Suezmax Aframax 180 80 160 70 140 60 Ship Price (in million $) Ship Price (in million $) 120 50 100 40 80 30 60 20 40 20 10 0 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 2017 2017 2018 2018 2018 2018 2019 Wet Bulk asset prices has improved by
Slide 19: Baltic Dirty & Clean Index
400 500 600 700 800 900 1,000 1,100 1,200 1,300 1,400 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Source – Industry Reports Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 BALTIC DIRTY TANKER INDEX May-18 Sep-18 Jan-19 May-19 400 500 600 700 800 900 1,000 Jan-14 May-14 Sep-14 BALTIC DIRTY & CLEAN IND
Slide 20: Total Oil Supply & Demand
TOTAL OIL SUPPLY & DEMAND Supply Demand Refinery Throughput (RHS) 103 84 101 million barrels per day million barrels per day 82 99 97 80 95 78 93 91 76 89 74 87 85 72 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 2015 2016 2017 2018 2017 2017 2017 2017 2018 2018 2018 2018 2019 In Q1CY19, refining throughput has h
Slide 21: Crude & Product Growth
CRUDE & PRODUCT GROWTH • Crude demand growth was approx. 0.9 Mn barrels a day in Q1CY2019 Y-O-Y • Core refined products demand growth was 1.2 Mn barrels a day largely due to middle distillate demand growth. • Both Crude & Product demand is principally fuelled by positive demand in Non-OECD Asia. 5 2
Slide 22: Refinery Margins
REFINERY MARGINS Refining Margins were negatively impacted in Asia whereas Atlantic basin continues to enjoy healthy margins especially in US. 5 22 Source – Industry Reports
Slide 23: Crude Oil Imports (US & China)
CRUDE OIL IMPORTS (US & China) 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 9,000 11,500 10,500 China Crude Oil total Imports (‘000 bpd) US Crude Oil total Imports (‘000 bpd) 8,500 9,500 8,000 8,500 7,500 7,500 6,500 7,000 5,500 4,500 6,500 3,500 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov
Slide 24: Crude Oil Exports (US)
CRUDE OIL EXPORTS (US) 2019 2018 2017 2016 2015 3,500 US Crude Oil total Exports (‘000 bpd) 3,000 2,500 2,000 1,500 1,000 500 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec In Q1CY2019, US exported 80% higher crude oil than Q1CY2018 24
Slide 25: US LPG Exports of Propane & Propylene
US LPG EXPORTS OF PROPANE & PROPYLENE In Q1CY2019, US propane & propylene exports were up 9% Y-O-Y 25
Slide 26: World Fleet Growth Crude Tankers
WORLD FLEET GROWTH CRUDE TANKERS Tanker Fleet - mn Dwt 24-Apr-19 1-Jan-19 1-Jan-18 1-Jan-17 1-Jan-16 VLCC 234.99 233.34 225.10 213.80 200.00 Suezmax 87.98 84.59 80.60 74.60 71.09 Aframax 71.80 68.75 67.20 66.40 64.37 Total (80k+)* 400.58 392.03 378.90 355.00 335.46 Order Book (mn Dwt) 2019 2020 2021
Slide 27: World Fleet Growth Product Tankers & VLGC
WORLD FLEET GROWTH PRODUCT TANKERS & VLGC Product Fleet - mn Dwt 24-Apr-19 1-Jan-19 1-Jan-18 1-Jan-17 LR2 40.10 37.9 36.60 33.50 LR1 27.33 26.9 26.51 25.20 MR/Handy (35k+) 84.44 83.3 82.40 80.40 Total (35k+)* 155.18 150.93 147.61 139.40 Order Book(mn Dwt) 2019 2020 2021+ Total Orderbook as % of curr
Slide 28: Key Points on Dry Bulk Markets
KEY POINTS ON DRY BULK MARKETS Asset • Capesize 5 yr old asset prices were down 8% in Q1CY2019 Y-O-Y Prices • Panamax & Supramax 5 yr old asset prices were flat in Q1CY2019 Y-O-Y Freight • BDI hits 595 on 11-Feb-19 due to Vale’s dam incident, seasonally low demand and Rates Australia’s Cyclone • Q1C
Slide 29: Bulker Asset Prices 5-Year Old
BULKER ASSET PRICES 5-YEAR OLD Capesize Panamax Supramax Capesize Panamax Supramax 180 40 160 35 140 30 Ship Price (in million $) Ship Price (in million $) 120 25 100 20 80 15 60 40 10 20 5 0 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 2017 2017 2018 2018 2018 2018 2019 Capesize asset prices were down 8% in Q1CY
Slide 30: Baltic Dry Index
BALTIC DRY INDEX 2,250 2,050 Vale’s Dam 1,850 Incident 1,650 1,450 1,250 1,050 850 650 450 250 Baltic Dry Index hit 4.5 year high of 1,774 in Jul’18 before falling to 595 in Feb’19. Currently it is trading close to 1,000. 5 30 Source – Industry Reports
Slide 31: China Iron Ore & Steel Production
CHINA IRON ORE & STEEL PRODUCTION World Steel China Steel % Growth World % Growth China 2000 15% Steel Production (in Million tonnes) 1500 10% 1000 5% China Steel Production increased 10% in 500 0% Q1CY2019 Y-O-Y 0 -5% 2013 2014 2015 2016 2017 2018 1Q20181Q2019 China Iron Ore Imports % Change Y-o-Y
Slide 32: China Coal Imports
10.0 15.0 -15.0 -10.0 0.0 5.0 -5.0 Mn Tonnes Jan-17 Feb-17 Mar-17 Apr-17 Source – Industry Reports May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 CHINA COAL IMPORTS Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 China coal imports change (Y-O-Y) Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 F
Slide 33: World Fleet Growth Dry Bulk
WORLD FLEET GROWTH DRY BULK Fleet - Mn Dwt 24-Apr-19 1-Jan-19 1-Jan-18 1-Jan-17 Capesize 336 335 324 315 Panamax 210 207 202 196 Handymax 203 201 196 189 Handysize 99 98 96 94 Total 848 841 818 794 Orderbook 2019 2020 2021 2022+ Total (mn Dwt) Orderbook 4.1% 5.1% 1.6% 0.1% 10.9% (%Fleet) Slippage Ab
Slide 34: Scrapping
SCRAPPING Fleet Vessel (mn Dwt) Scrapping (% of beginning world fleet) Category 24 Apr 19 Q1CY2019 2018 2017 2016 2015 2014 Crude 400.58 0.11% 4.62% 2.35% 0.35% 0.23% 1.60% Product 155.18 0.06% 1.64% 1.42% 0.62% 0.61% 1.19% Dry Bulk 848.00 0.39% 0.54% 1.77% 3.67% 4.03% 2.25% Moderate to high scrappi
Slide 35: Greatship (India) Limited
Greatship (India) Limited (a 100% subsidiary)
Slide 36: Offshore Business Fleet Profile
OFFSHORE BUSINESS FLEET PROFILE Fleet Utilization Current Owned Fleet Extent of coverage of Fleet Count Type Category fleet's operating days (FY20) Jack Up Rigs (350ft) 4 PSV 96% Platform Supply Vessels (PSV) 4 Anchor Handling Tug cum ROVSV 82% 8 Supply Vessels (AHTSV) AHTSV 90% Multipurpose Platfor
Slide 37: Key Points on E&P Markets
KEY POINTS ON E&P MARKETS Q1 CY2019 Day Rates • Charter rates and utilization have started to pickup form the lows in certain geographies Fleet • Rigs: Total fleet remains broadly same compared to last quarter however, there is a decline of about 3.2% over one year. Growth • OSV’s: Total fleet remai
Slide 38: Offshore E&P Spending
OFFSHORE E&P SPENDING According to various industry reports, after the sharp fall over last 3 years, the E&P spending declined marginally in 2018 and is expected to either stabilize or increase marginally in 2019. Source – Industry Reports 38
Slide 39: Global Fleet Supply Offshore
GLOBAL FLEET SUPPLY OFFSHORE Fleet & Orderbook Number Jackup Rigs AHTSVs PSV Current Fleet 516 2019 1624 Orderbook 70 80 131 O/B to current fleet 13.6% 4.0% 8.1% • YTD CY2019 actual deliveries have been far lower than scheduled. Due to bleak employment scenario owners have refrained from taking deli
Slide 40: Financial Results FY 2018-19
FINANCIAL RESULTS FY 2018-19 40
Slide 41: Financial Highlights
FINANCIAL HIGHLIGHTS GE Shipping FY19 consolidated Net Loss at Rs. 21.45 Crores Proposes a dividend of Rs. 5.40 per share Standalone Key Figures Consolidated FY19 FY18 (Amount in Rs. Crs) FY19 FY18 Income Statement 2,913.41 2,193.29 Revenue (including other income) 3829.89 3140.57 864.62 986.88 EBIT
Slide 42: Financial Highlights
FINANCIAL HIGHLIGHTS Standalone Key Figures Consolidated FY19 FY18 FY19 FY18 Key financial figures 29.68% 45.00% EBITDA Margin 35.13% 48.05% -0.14% -0.99% #Return on Equity (ROE) 1.61% 0.01% 3.60% 2.88% #Return on Capital Employed (ROCE) 4.25% 3.65% 0.81 0.81 Gross Debt/Equity Ratio 0.88 0.90 0.36 0
Slide 43: Financial Highlights
FINANCIAL HIGHLIGHTS Breakup of Revenue Days Revenue Days Q4 FY19 Q4 FY18 Owned Tonnage 4,278 4,215 Inchartered Tonnage 105 69 Total Revenue Days 4,383 4.284 Total Owned Tonnage (mn.dwt) 3.90 3.88 Average TCY Details Mix of Spot & Time Average (TCY $ per day) Q4’FY19 Q4’FY18 % Change Days (in %) Q4’
Slide 44: Thank You
THANK YOU THANK YOU visit us at www.greatship.com 44
The Great Eastern Shipping Company — FY2019 Earnings Presentation on 6ix