Great Eastern Shipping Co. Ltd. · NSE:GESHIP
Great Eastern Shipping — The Great Eastern Shipping — Q3 FY2021 Earnings Presentation
49 slides from Great Eastern Shipping's earnings presentation, Jan 29, 2021
Slide 1: The Great Eastern Shipping Co. Ltd.
The Great Eastern Shipping Co. Ltd.
Slide 2: Quarterly Results Updates – Q3FY21
The Great Eastern Shipping Co. Ltd. QUARTERLY RESULTS UPDATES – Q3FY21 29 January 2021
Slide 3: Forward looking statements disclaimer
The Great Eastern Shipping Co. Ltd. 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, s
Slide 4: Financial Results Q3 FY 2020-21
The Great Eastern Shipping Co. Ltd. FINANCIAL RESULTS Q3 FY 2020-21 4
Slide 5: Reported Financial Highlights
The Great Eastern Shipping Co. Ltd. REPORTED FINANCIAL HIGHLIGHTS GE Shipping Q3FY21 consolidated Net Profit at Rs. 176 Crores Standalone Key Figures Consolidated Q3FY21 Q3FY20 9MFY21 (Amount in Rs. Crs) Q3FY21 Q3FY20 9MFY21 Income Statement 696 935 2,277 Revenue (including other income) 859 1,150 2
Slide 6: Normalized Financial Highlights
The Great Eastern Shipping Co. Ltd. NORMALIZED FINANCIAL HIGHLIGHTS GE Shipping Q3FY21 consolidated Normalized Net Profit at Rs. 115 Crores Standalone Key Figures Consolidated Q3FY21 Q3FY20 9MFY21 (Amount in Rs. Crs) Q3FY21 Q3FY20 9MFY21 Income Statement 696 935 2,277 Revenue (including other income
Slide 7: Normalized Financial Notes
The Great Eastern Shipping Co. Ltd. NORMALIZED FINANCIAL NOTES 1) The impact of the exchange rate on foreign currency loans and current assets and liabilities, including cash and bank balances, has been removed 2) NCD & Currency Swap: • Funds raised through NCDs have been swapped into USD using INR-
Slide 8: Normalized Financial Highlights
The Great Eastern Shipping Co. Ltd. NORMALIZED FINANCIAL HIGHLIGHTS Standalone Key Figures Consolidated Q3FY21 Q3FY20 9MFY21 Q3FY21 Q3FY20 9MFY21 Key financial figures 10.62% 27.20% 17.59% *Return on Equity (ROE) (%) 6.11% 19.77% 12.43% *Return on Capital Employed (ROCE) 10.33% 18.13% 11.63% 8.68% 5
Slide 9: Performance Review
The Great Eastern Shipping Co. Ltd. PERFORMANCE REVIEW Break up of Revenue days (Shipping) Revenue Days Q3 FY21 Q3 FY20 Owned Tonnage 4,081 4,227 Inchartered Tonnage 44 - Total Revenue Days 4,125 4,227 Total Owned Tonnage (mn.dwt) 3.51 3.70 Break up of Revenue days (Offshore) Revenue Days Q3 FY21 Q3
Slide 10: Revenue Visibility & Coverage
The Great Eastern Shipping Co. Ltd. REVENUE VISIBILITY & COVERAGE Category-wise coverage of operating days (Shipping) --- FY21 Extent of coverage of fleet’s Category Revenue Visibility operating days Crude Carriers 52% Product Carriers 40% LPG Carriers 100% Rs 259 Cr Dry Bulk 48% Category-wise cover
Slide 11: GESCO Standalone Debt Repayment Schedule
The Great Eastern Shipping Co. Ltd. GESCO STANDALONE DEBT REPAYMENT SCHEDULE (NEXT 5 YEARS) GESCO Standalone (USD Mn) 90 83 83 700 584 76 78 80 600 70 65 500 USD Million 60 USD Million 50 400 40 32 300 30 200 20 10 100 0 0 Dec'20 Mar'21 Mar'22 Mar'23 Mar'24 Mar'25 Mar'26 Repayments Loan O/s (RHS) GE
Slide 12: Fleet Profile
The Great Eastern Shipping Co. Ltd. FLEET PROFILE SHIPPING Fleet DWT Number of Ships Average Age (Yrs.) Crude Carriers 1,164,215 9 13.38 Product Carriers 1,092,465 18 12.84 Gas Carriers 224,260 5 17.89 Dry Bulk Carriers 1,026,462 13 8.28 Total 3,507,402 45 12.01 OFFSHORE Fleet Number of Units Averag
Slide 13: Fleet Development
The Great Eastern Shipping Co. Ltd. FLEET DEVELOPMENT Crude Tankers: • We have sold our two oldest Suezmax Vessels both Built in 2000 Product Tankers: • We have bought an LR2 Vessel Built 2012 DryBulk: • We have contracted to sell a Supramax Bulk Carrier Built 2006 • We have contracted to buy a Cape
Slide 14: The Great Eastern Shipping Co. Ltd.
The Great Eastern Shipping Co. Ltd.
Slide 15: Tanker Market
The Great Eastern Shipping Co. Ltd. TANKER MARKET
Slide 16: Freight Rates are currently around operating costs
The Great Eastern Shipping Co. Ltd. Freight Rates are currently around operating costs Suezmax Freight Rates ($ per day) Q1FY Q2FY Q3FY YTD FY 2020 15,687 16,700 74,653 35,680 FY 2021 47,808 12,074 6,587 22,156 Y/Y 205% -28% -91% -38% MR Freight Rates ($ per day) Q1FY Q2FY Q3FY YTD FY 2020 11,389 9,
Slide 17: Refinery Runs well below Pre-COVID Levels
The Great Eastern Shipping Co. Ltd. Refinery Runs well below Pre – COVID Levels Despite revival of growth in Global GDP Change in Refinery Runs y/y (mbpd) 2.0 0.8 0.3 0.1 0.0 -0.8 -0.7 -0.3 -2.0 -1.3 -1.4 -0.9 -4.0 -6.0 -8.0 -6.9 -7.5 -7.5 -7.6 -10.0 -9.7 -12.0 -11.0 -10.5 -11.8 -11.5 -14.0 Apr May
Slide 18: Demand for Oil is unlikely to reach Pre-COVID Levels Until 2022
The Great Eastern Shipping Co. Ltd. Demand for Oil is unlikely to reach Pre-COVID Levels Until 2022 Oil demand growth (mbpd) Cal 2020 Cal 2021 EA -8.0 5.0 IEA -8.9 5.5 OPEC -9.8 5.9 EIA -9.0 5.6 Mbpd: Million barrels per day 18 Sources: Industry Reports
Slide 19: Release of Floating Storage Has added to Fleet Supply
The Great Eastern Shipping Co. Ltd. Release of Floating Storage in the Quarter Has added to the Fleet Supply Crude Tankers 10k+ dwt (storage as % of fleet) Products Tankers 10k+ dwt (storage as % of fleet) 12% 10% Peaked on Peaked on 8-May-20 9% 8-May-20 10% 10.5% 9.0% 8% 7% 8% 6% 6% 5% 4% 4% 3% 2%
Slide 20: Crude Trade is likely to remain depressed
The Great Eastern Shipping Co. Ltd. Until Floating Storage Clears and Demand Revives Crude Trade is likely to remain depressed Change in crude trade y/y (%) 0% -2% -4% -6% -5% -8% -10% -9% -9% -12% -12% -14% Q1 FY21 Q2 FY21 Q3 FY21 YTD FY21 20 Sources: Industry Reports
Slide 21: A similar story for the Product Trade
The Great Eastern Shipping Co. Ltd. A similar story for the Product Trade Change in products trade y/y (%) 0% -2% -4% -6% -8% -10% -9% -12% -12% -12% -14% -16% -15% -18% Q1 FY21 Q2 FY21 Q3 FY21 YTD FY21 21 Sources: Industry Reports
Slide 22: Dry Bulk Market
The Great Eastern Shipping Co. Ltd. DRY BULK MARKET
Slide 23: Dry Bulk Markets
The Great Eastern Shipping Co. Ltd. Major Exporters - Iron ore/Coal/Grains (MMT,%) DRY BULK EuropeUK/Med 4% Others 5% MARKETS Canada+US, Colombia 2% 9% Argentina/S .America,… Australia 38% Commodity wise Break up of Brazil 14% Global DB demand (%) Indonesia 14% Minor Bulks Coal 28% S.Africa/Other Af
Slide 24: Earnings have softened across Asset Classes
The Great Eastern Shipping Co. Ltd. Earnings have softened across Asset Classes Capesize Freight Rates ($ per day) Q1FY Q2FY Q3FY YTD FY 2020 11,372 29,365 22,184 20,974 FY 2021 9,932 20,761 16,944 15,879 Y/Y -13% -29% -24% -24% Panamax Freight Rates ($ per day) Q1FY Q2FY Q3FY YTD FY 2020 9,521 16,0
Slide 25: Trade Growth has begun to show positive signs
The Great Eastern Shipping Co. Ltd. Trade Growth has begun to show positive signs Change in Dry Bulk trade y/y (%) 1.0% 0.6% 0.0% -1.0% -2.0% -1.7% -1.8% -3.0% -4.0% -4.3% -5.0% Q1 FY21 Q2 FY21 Q3 FY21 YTD FY21 25 Source – Industry Reports
Slide 26: China Coal Imports Surge in December
The Great Eastern Shipping Co. Ltd. CHINA COAL IMPORTS SURGE IN DECEMBER Monthly YoY Change in China Coal imports -mt 36 16 4 6 1 -2 -5 -7 -9 -12 -12 -12 Dec-20 Jan-20 Aug-20 Oct-20 Nov-20 Mar-20 Feb-20 Sep-20 May-20 Jul-20 Jun-20 Apr-20 Chinese coal imports have been decreasing through the year due
Slide 27: Global Drybulk Commodity Seaborne Trade Data
The Great Eastern Shipping Co. Ltd. GLOBAL DRYBULK COMMODITY SEABORNE TRADE DATA Absolute Inc/Dec YoY Global Commodity Trade Data - mt % Inc/Dec YoY (CY20-CY19) Iron Ore 59 3.8% Coal -118 -9.1% Grains 32 7.5% Minor Bulk -48 -3.2% Total Growth -77 -1.6% China Iron Ore trade growth has been 9.30% for
Slide 28: China & World Steel Production
The Great Eastern Shipping Co. Ltd. CHINA & WORLD STEEL PRODUCTION World Steel China Steel % Growth World % Growth China 2000 8% 1800 7% Steel Production (in Million tonnes) 1600 6% China Steel Production 1400 increased by 6% in 5% CY2020 Y-O-Y. Whereas, 1200 World Steel Production 4% growth was neg
Slide 29: LPG (Gas) Market
The Great Eastern Shipping Co. Ltd. LPG (GAS) MARKET
Slide 30: Despite a lower YTD freight rate, earnings remain strong
The Great Eastern Shipping Co. Ltd. Despite a lower YTD freight rate, earnings remain strong VLGC Freight Rates ($ per day) Q1FY Q2FY Q3FY YTD FY 2020 50,691 53,795 66,010 56,832 FY 2021 33,007 40,722 68,362 47,364 Y/Y -35% -24% 4% -17% 30 Source – Industry Reports
Slide 31: Trade Growth has been strong during the quarter
The Great Eastern Shipping Co. Ltd. Trade Growth has been strong during the quarter Change in VLGC trade y/y (%) 8.0% 6.7% 6.0% 4.0% 2.3% 2.0% 0.6% 0.0% -2.0% -4.0% -6.0% -8.0% -6.8% Q1 FY21 Q2 FY21 Q3 FY21 YTD FY21 31 Source – Industry Reports
Slide 32: LPG Panama Canal Transits
The Great Eastern Shipping Co. Ltd. LPG PANAMA CANAL TRANSITS Change in policy by Panama Authority to reserve slots for liners and LNG vessels had a significant impact on frequently trading LPG vessels through Panama. This contributed to supply tightness and hence freight rates soaring past $100,000
Slide 33: Asset Price Movement - Shipping
The Great Eastern Shipping Co. Ltd. ASSET PRICE MOVEMENT - SHIPPING 33
Slide 34: Asset Price Movement (Indexed) Over the Last 5 Years
100 55 60 65 70 75 80 85 90 95 100 110 120 130 140 150 160 170 90 Jan-16 Jan-16 Apr-16 Apr-16 Jul-16 Jul-16 Oct-16 Oct-16 Jan-17 Jan-17 Apr-17 Apr-17 Jul-17 Jul-17 Sources: Industry Reports Oct-17 Oct-17 Jan-18 Jan-18 Apr-18 Apr-18 Jul-18 Jul-18 Suezmax Capesize Oct-18 Oct-18 Jan-19 Jan-19 Apr-19 Ap
Slide 35: One of the Lowest Order Book to Fleet Ratios
The Great Eastern Shipping Co. Ltd. One of the Lowest Order Book to Fleet Ratios For Tankers and Bulkers Lowest Since December 2013 Orderbook as % of Fleet 10% 9.30% 9% Lowest Since January 1996 8% Lowest Since January 6.80% 1996 7% 6% 5.80% 5% 4% 3% 2% 1% 0% Crude Tankers Product Tankers Dry Bulk N
Slide 36: A weak freight market may incentivize scrapping
The Great Eastern Shipping Co. Ltd. A weak freight market may incentivize scrapping Scrapping Potential (Age>20 years) as % of Total Fleet 10% 9.00% 9% 7.90% 8% 7.20% 7% 6% 5% 4% 3% 2% 1% 0% Crude Tankers Product Tankers Dry Bulk 36
Slide 37: Scrapping
The Great Eastern Shipping Co. Ltd. SCRAPPING Fleet Vessel (mn Dwt) Scrapping (% of beginning world fleet) Category 31 Dec 20 2020 2019 2018 2017 2016 2015 2014 Crude 428.58 0.38% 0.61% 4.62% 2.35% 0.35% 0.23% 1.60% Product 164.23 0.51% 0.43% 1.64% 1.42% 0.62% 0.61% 1.19% Dry Bulk 911.65 1.63% 0.92%
Slide 38: Greatship (India) Limited
The Great Eastern Shipping Co. Ltd. Greatship (India) Limited (a 100% subsidiary)
Slide 39: Offshore Business Fleet Profile
The Great Eastern Shipping Co. Ltd. OFFSHORE BUSINESS FLEET PROFILE Fleet Utilization Extent of coverage of fleet's operating days (3M Current Owned Fleet Type Fleet Count FY21) Jack Up Rigs (350ft) 4 80% Anchor Handling Tug cum Supply Vessels 8 88% (AHTSV) Multipurpose Platform Supply and Support 2
Slide 40: Offshore E&P Spending
The Great Eastern Shipping Co. Ltd. OFFSHORE E&P SPENDING The source has revised Offshore E&P spending higher across the years. 40 Source – Industry Reports
Slide 41: Key Points on Offshore Markets Q4CY2020
The Great Eastern Shipping Co. Ltd. KEY POINTS ON OFFSHORE MARKETS Q4CY2020 • The oil price has bounced back up sharply from the lows of early 2020 on back of OPEC cuts Day Rates and relaxation of lockdown restrictions. • Early terminations & contract renegotiations seen in early 2020 have now reduc
Slide 42: Global Fleet Supply Offshore
The Great Eastern Shipping Co. Ltd. GLOBAL FLEET SUPPLY OFFSHORE Fleet Profile Number Jackup Rigs PSVs + AHTSVs Current Fleet 520 3571 Orderbook 39 166 O/B to current fleet 7.5% 4.6% Total Scrapping since January 2016 (nos.) 102 360 No. of Vessels/Rigs more than 20/30 years old 38% 19% (as %age of f
Slide 43: No. of Vessels / Rigs coming up for repricing
The Great Eastern Shipping Co. Ltd. Vessels / Rigs coming up for repricing OFFSHORE Vessels Rigs 5 4 NO. OF VESSELS / RIGS 3 3 2 1 1 1 1 1 1 0 0 0 0 0 Q4 FY21 H1 FY22 H2 FY22 H1 FY23 H2 FY23 H1 FY24 H2 FY24 H1 FY25 43 Source – Industry Reports
Slide 44: Greatship Debt Repayment Schedule
The Great Eastern Shipping Co. Ltd. GREATSHIP DEBT REPAYMENT SCHEDULE (NEXT 5 YEARS) GIL (USD Mn) 120 250 202 97 100 USD Million 200 USD Million 80 150 60 43 100 40 32 23 20 50 6 - - Dec-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Repayments Loan O/s (RHS) 44
Slide 45: Key Valuation Metrics
The Great Eastern Shipping Co. Ltd. KEY VALUATION METRICS 45
Slide 46: Net Debt Expansion & Reduction Phase
The Great Eastern Shipping Co. Ltd. NET DEBT EXPANSION & REDUCTION PHASE Net Debt Expansion Net Debt Reduction 400 Phase 0.60 Phase 350 0.50 USD Million 300 0.40 250 200 0.30 150 0.20 100 0.10 50 - - FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 9MFY2021 Net Debt Net Debt to Equity 46
Slide 47: Share Price to Consolidated Net Asset Value
The Great Eastern Shipping Co. Ltd. SHARE PRICE TO CONSOLIDATED NET ASSET VALUE Share Price to Consolidated NAV 600 1 0.9 500 0.8 INR/Share 0.7 400 0.6 300 0.5 0.4 200 0.3 0.2 100 0.1 0 0 FY16 FY17 FY18 FY19 FY20 9MFY21 Consolidated NAV Standalone Share Price/Consol. NAV (RHS) 47
Slide 48: Summary – Shipping & Offshore
The Great Eastern Shipping Co. Ltd. SUMMARY – SHIPPING & OFFSHORE Market Positives (Shipping): • Historically Low Orderbook (Except Gas) • High Scrapping Potential (Except Gas) Market Negatives (Shipping): • Short Term Supply Overhang • Weak Fundamental Trade Demand Market Negatives (Offshore): • E&
Slide 49: Thank You
The Great Eastern Shipping Co. Ltd. THANK YOU visit us at www.greatship.com 49
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